The UAE has pledged $200 million to help low-income and vulnerable countries fight climate change.
The commitment comes in the form of Special Drawing Rights (SDRs), pledged to IMF’s Resilience and Sustainability Trust (RST).
The RST is a trust held by the IMF and provides long-term concessional funding for climate resilience and pandemic preparedness.
The RST supports climate resilience in low- and middle-income economies and countries vulnerable to the impacts of climate change.
The announcement, which came during the World Climate Action Summit (WCAS), follows up from a previous pledge of $200 million to support development in low-income countries announced earlier this year in Marrakech.
Mohamed Hadi Al Hussaini, Minister of State for Financial Affairs, said: “The Ministry of Finance in the UAE prioritises identifying climate financing gaps, assessing the impact of climate change mitigation policies on capital flows, and recognising the macroeconomic risks resulting from climate change.
“We work closely with our partners from international financial organizations, such as the IMF, to enhance multilateral coordination in sustainable finance action.”
SDRs are a stable asset, pegged against a basket of five currencies – the US Dollar, the euro, the Chinese Renminbi, the Japanese Yen, and the British Pound -- which IMF members can exchange for a freely usable currency when needed.
The RST has received more than $40 billion in SDR pledges, and 11 countries have been approved as recipients so far.
(Reporting by Imogen Lillywhite; editing by Seban Scaria)