The IMF needed to be more present in responding to the climate challenge and it therefore put together the Resilience and Sustainability Facility (RSF). The aim is that the IMF helps to bring climate challenges and energy sector challenges into the macro-framework as strongly as possible, Mark Horton, Deputy Director of the European Department of the International Monetary Fund, stated in the podcast “Give Sense to Money”, IPN reports.
“We can see that in countries that have had RSF programs so far – in Europe it would be Kosovo and now Moldova – it’s useful that it gives the Ministry of Finance a strong seat at the table and helping ensure that climate policies are well anchored in the overall macroeconomic framework, so they’re not forgotten about, but they're not too large either, so that they fit into the budget framework, they fit into the monetary and financial sector framework, and that real progress can be made,” said Mark Horton.
The facility offers 20-year financing, which is very long term for the IMF. Typically, the financing is in the range of three to seven or eight years. It has a long grace period at the beginning, more than 10 years.
“So, it’s really attractive financing for countries to use this financing. The idea is it helps countries strengthen their policy frameworks around climate issues and around energy security. In Moldova, it will help put in place, for example, a new climate action law that will help set the basis for Moldova to respond to challenges like the Carbon Border Adjustment Mechanism that will come in place for in the European Union and affect Moldovan exports to the EU, towards the need to have in place an emissions trading system in Moldova, to upgrade and link Moldova’s electricity and energy system networks more to the European markets,” explained Mark Horton.
The RSF Facility will help in green finance, setting the basis for banks to increasingly provide financing that’s climate positive or climate supportive. Mark Horton noted that decisions that are supportive of the authorities’ overall efforts to reduce greenhouse gas emissions over the next 20 or 30 years are needed. So, it’s important that policies are oriented around that not only in terms of, let's say, what the Moldovan government is doing in terms of investing in roads or investing in irrigation systems or the water network, but also what the financial sector is doing in its own operations.
