(Ecofin Agency) - In February 2024, the IMF staff reached an agreement with the Ivorian state for a financing of $1.3 billion under the Rapid Financing Instrument (RFI). The loan was approved by the institution's board of directors and is expected to have a repayment term of 20 years plus a grace period of 10 and a half years.

The International Monetary Fund (IMF) approved the financing of $1.3 billion to Côte d'Ivoire to finance climate resilience. The operation was approved on Friday, March 15, 2024, by the board of directors of the Fund.

The financing will be disbursed as part of a 30-month agreement signed with the country, after negotiations conducted under the Resilience and Sustainability Facility (RSF). These discussions had already been announced by the Ivorian government in 2023, which highlighted that the agreement would support the state's strategy to turn Côte d'Ivoire into an upper-middle-income country by 2030.

"The ECF/EFF arrangements support the government's economic program over 2023-2026 for macroeconomic stability and the structural economic transformation to transition Côte d'Ivoire towards an upper middle-income country,” the IMF specifies. Furthermore, "the authorities have made strong commitments to reducing the adverse effects of climate change and have developed several government initiatives with development partners’ involvement. The RSF arrangement will support the authorities’ ambitious homegrown package of reform measures."

In Côte d'Ivoire, agriculture is one of the main drivers of the economy, employing about half of the workforce and accounting for 17% of the GDP and 10% of tax revenues. As the world's leading exporter of cocoa, the country has been facing, in recent years, an increasing number of climatic phenomena that threaten its production and thus the income of thousands of farmers. A situation that compels the authorities to plan effective adaptation mechanisms.

The IMF funding will therefore be used to consolidate safeguard measures for the agricultural sector while enhancing resilience to climate variability. It will also aim at integrating climate considerations into the management of public finances, improving the governance of climate policies, creating a framework governing green and sustainable finance, and mastering and reducing greenhouse gas emissions.

As a reminder, the new IMF funding adds to a previous one of $3.5 billion concluded in May 2023 under the Extended Credit Facility (ECF) and the Expanded Financing Facility (EFF) over 40 months. In accordance with IMF standards, the funds allocated under the RSF are repayable over a period of 20 years with a grace period of 10 and a half years during which no principal repayment is required.