Jeddah, (UNA-OIC) – The Arab Coordination Group (ACG), comprising of Arab Financial Development Institutions, has approved/committed US$ 8.6 billion financings for developing countries to help them tackle the economic impact of the COVID-19 Pandemic.
Earlier, on 18 May 2020, at the invitation of the Islamic Development Bank (IsDB), the ACG Institutions agreed to pledge US$ 10 billion for a coordinated initiative to address and mitigate the negative impacts of the novel Coronavirus Pandemic on developing countries. This package will cover two main tracks. First, it would focus on health emergency response; and second, it would contribute to sustaining and reviving the economic and social sectors in line with the 3Rs strategy (Respond, Restore, Restart), to provide support for short, medium- and long-term needs.
The US$ 8.6 billion approved/committed by the ACG represents 86% of the US$ 10 billion pledged by the ACG institutions. Substantial amounts have already been disbursed to benefit a large number of people in beneficiary countries and communities. Some ACG members have already exceeded their initial pledged targets, while others are well on the way to achieve or exceed their multi-year pledge target, ensuring the readiness of projects for implementation and delivery of results.
In view of the magnitude of the Pandemic’s impacts, some ACG members have also been entrusted by their national governments or by other organizations to deliver additional assistance to respond to the Pandemic.
The approved/committed financing, provided under different Funding Schemes, has been paramount to help developing countries and support their efforts to respond to the emergency and recover from the adverse effects caused by COVID-19. To alleviate the financial burden being experienced by the developing countries related to lockdowns, some of the ACG members have also provided Budgetary and Balance of Payment Support. Further, in response to the G20 Debt Service Suspension Initiative (DSSI) under the Presidency of Saudi Arabia, some institutions have suspended payment of Loan Service Fees to provide much-needed relief during these challenging times. The assistance provided under the ACG pledge was global and will benefit many countries in all regions of the world.
A significant part of the financing was focused on emergency humanitarian and medical relief and assistance. Strengthening of healthcare services and ensuring food security featured prominently in the approved financing of the ACG members. Other important areas financed under the pledge included trade financing and promotion especially to support the exports, private sector operations notably by extending lines of financing to SMEs, insurance solutions and guarantees to mitigate foreign direct investment and trade-related political and commercial risks, and protect businesses from the negative impacts of these risks.
While approving the remaining amount of the US$ 10 billion pledge during the coming months, the ACG members will ensure effective implementation of approved projects to achieve targeted results on the ground.
As part of the process of this initiative, the ACG members would collaborate with a wide range of partners, including Multilateral Development Banks, International Financial Institutions, United Nations agencies, international, regional, and local organizations.
The ACG comprises of ten Arab development financial institutions:
Abu Dhabi Fund for Development:
– Arab Bank for Economic Development in Africa
– Arab Fund for Economic and Social Development
– Arab Gulf Development Program
– Arab Monetary Fund
– Islamic Development Bank Group
– Kuwait Fund for Arab Economic Development
– OPEC Fund for International Development
– Qatar Fund for Development
– Saudi Fund for Development