Resilience and Sustainability Facility—Updated Operational Guidance Note

IMF staff regularly produces papers proposing new IMF policies, exploring options forreform, or reviewing existing IMF policies and operations. The Report prepared by IMFstaff and completed on January 16, 2025 has been released. The staff report was issued to the Executive Board for information. The report wasprepared by IMF staff. The views expressed in this paper are those of the IMF staff anddo not necessarily represent the views of the IMF's Executive Board. The IMF’s transparency policy allows for the deletion of market-sensitive informationand premature disclosure of the authorities’ policy intentions in published staff reportsand other documents. Electronic copies of IMF Policy Papersare available to the public fromhttp://www.imf.org/external/pp/ppindex.aspx International Monetary FundWashington, D.C. RESILIENCE AND SUSTAINABILITY FACILITY—UPDATEDOPERATIONAL GUIDANCE NOTE EXECUTIVE SUMMARY This note provides general guidance on the operationalization of the Resilienceand Sustainability Facility (RSF) for arrangement requests and reviews.The RSFcomplements the existing IMF lending toolkit by providing longer-term, affordablefinancing to eligible members to help them address longer-term structural challengesfrom climate change and pandemic preparedness. The note has benefited fromexperience gained during early operationalization in a pilot phase and has beenupdated to reflect the outcomes of the Interim Review of the RST and Review ofAdequacy of Resources that took place in May 2024. Operational issues are covered in several areas: •The RSF framework, including objectives, eligibility and qualification;•RSF arrangement design, specifically identifying longer-term structural challenges,assessing the associated Balance of Payments (BoP) risks, designing reformmeasures and high-quality reform packages), and determining access levels;•The catalytic role of RSF-supported reforms and financing;•Coordinating diagnostics and reform priorities with outside expert stakeholders;•The Enhanced IMF-World Bank Group Collaboration Framework for Scaled-UpClimate Action;•The Principles for Stepped-up Cooperation with the World Bank Group and theWorld Health Organization on Pandemic Preparedness;•Other RSF modalities, such as phasing, reviews, safeguards, and lending terms;•Other operational considerations and documentation requirements. The note is an aid to the implementation of the policy and its underlying principles. Ifthere is any instance in which a provision of the guidance note or its implementationconflicts with Board policy, Board policy prevails. RESILIENCE AND SUSTAINABILITY FACILITY—UPDATED OPERATIONAL GUIDANCE NOTE Prepared by a team led by Andrea Gamba (SPR) comprising staff ofthe Strategy, Policy, and Review Department, Finance Department andLegal Department, with contributions from FAD and MCM, including:Yazan Al-Karablieh, Nicolas Arregui, Javier Arze del Granado, ThomasAugsten, Jocelyn Boussard, Alex Grohovsky, Yuko Hashimoto, JehannJack, Deeksha Kale, Seunghwan Kim, Lukas Kohler (departmental lead),Pritha Mitra, Mariza Montes de Oca Leon, Henk Reinders, Bilal Tabti,and Christoph Ungerer, (all SPR); Vimal Thakoor (ICD); Linda Kaltani(departmental lead) and Alex Massara (both FIN); Emmanuel Mathias,Nadia Rendak, Anjum Rosha (departmental lead), JonathanSwanepoel, and Joel Turkewitz (all LEG); Dora Benedek, ChristineRichmond, and Suphachol Suphachalasai (all FAD); Tumer Kapan,Elena Loukoianova, and Ananthakrishnan Prasad (all MCM). Researchassistance was provided by Maxwell Kushnir and Takako Iwaki, andeditorial and administrative assistance by Linda Bisman and AlexandraPanagiotakopoulou. Approved ByDora Iakova (SPR),Papa N’Diaye (FIN),Bernhard Steinki (LEG) The December 2024 update of this Operational Guidance Note wasprepared under the guidance of Pritha Mitra (SPR) and GabrielaRosenberg (LEG) by a team supervised by Andrea Gamba (SPR)comprising David Hart, Dominique Fayad, Clara Galeazzi, (all SPR),Anjum Rosha, Eugenia Siracusa (LEG); Linda Kaltani, Jacques Bougha-Hagbe, Simon Cooney, Greetje Everaert, Leonardo Pio Perez, AlexMassara, Kamfwa Mulenga (FIN); Mauricio Soto, Nick Carroll (FAD).Administrative assistance was provided by Elisavet Zachou and NaanaAsomah. CONTENTS Glossary __________________________________________________________________________________________5 A. Objectives, Eligibility, Qualification and Use____________________________________________________9B. Concurrent UCT-Quality Instrument __________________________________________________________12C. Member’s Capacity to Repay and Debt Sustainability _________________________________________15 A. Identifying Vulnerabilities Associated with Qualifying Challenges_____________________________16B. Assessing Prospective Balance of Payments Stability Risks____________________________________19C. Designing a High-Quality Package of Reforms________________________________________________21D. Determining Access Levels_____