CCRT provides grants for debt service relief to countries hit by catastrophic events, including public health disasters such as covid-19.
"Through this contribution to the CCRT, Team Europe continues to stand in solidarity with its most vulnerable partners. In this difficult period, the resources freed up can provide social services for the most vulnerable people, such as access to essential healthcare and education for young people, including girls. Team Europe’s Global Recovery Initiative is working to provide debt relief and sustainable investment for the SDGs," said Jutta Urpilainen, European Commissioner for International Partnerships, in a press release issued on Monday.
This disbursement is part of the EU’s overall contribution of €183 million (US$215 million) to the CCRT.
It finances grants for the third tranche of CCRT debt service relief that was approved by the IMF´s Executive Board on April 1, 2021.
The EU stands ready to disburse its remaining grant contribution in support of additional debt service relief in the context of potential future CCRT tranches.
With this contribution, the EU, together with the EU institutions and its Member states, has committed more than half of the current CCRT pledges.
"The EU’s generous contribution of €183 million is critical to help the world’s most vulnerable countries cope with the impact of the COVID-19 crisis and continue providing health care, economic and social support for their people. I am grateful to the EU and its member states for their support and strong partnership. I urge other countries to contribute to the CCRT so we can in turn support our most vulnerable member countries," IMF Managing Director Kristalina Georgieva noted.
Together with the third tranche, the IMF has provided about SDR519 million (about US$736 million or €626 million) in grants for debt relief to all 29 CCRT-eligible members since the pandemic began in early 2020.
The purpose of the debt relief initiative under the CCRT is to free up resources to meet exceptional balance of payments needs created by the disaster rather than having to allocate those resources to debt service.