Reviving the IMF’s Resilience and Sustainability Facility: Challenges and Opportunities Ahead

The International Monetary Fund’s newest lending instrument—the Resilience and Sustainability Facility (RSF)—was launched in October 2022 to help low-income and vulnerable middle-income countries strengthen their resilience to climate change and future pandemics. The facility provides long-term concessional financing and complements the IMF’s traditional stabilization role by promoting forward-looking investments in climate transition and pandemic preparedness in an effort to forestall future balance-of-payments strains.

Since its inception, the RSF has supported 26 countries, with a strong initial uptake: 16 countries accessed its resources between November 2022 and December 2023. However, momentum has since slowed. Despite a few large programs in 2025 that absorbed significant financing, it is unlikely that all remaining RSF resources will be utilized by 2026 without adjustments to the facility’s design features.

At the April 2025 IMF–World Bank Spring Meetings, US Treasury Secretary Scott Bessent noted that the IMF had broadened its engagement beyond its core mandate to include climate change, gender, and social inclusion. He reiterated these concerns at the Annual Meetings last week, arguing that that IMF conditionality in RSF programs had extended into non-core areas. Other observers have likewise questioned the fund’s involvement in climate-related issues as it stretches its traditional boundaries.

Amid slowing demand and intensifying US scrutiny, the RSF is at a crossroads. We argue that RSF activities, when appropriately designed, align fully with the IMF’s core mandate. The fund can maximize the impact of its remaining RSF uncommitted resources—by prioritizing the most vulnerable countries, easing design features that restrict access, avoiding an overly narrow climate-sector focus, and incorporating pandemic preparedness measures in programs where countries express interest. These steps would ensure efficient use of RSF resources—dedicated to resilience and sustainability—and demonstrate the IMF’s role as a prudent steward to recycled special drawing rights (SDRs). By easing current constraints, the RSF could provide cheap financing to countries most in need.

Financial status of the RSF

As of July 2025, developed countries had recycled SDR 33 billion to the Resilience and Sustainability Trust (RST), the trust which funds the RSF. The United States did not contribute to the RST, although it has supported the IMF’s other trust (the Poverty Reduction and Growth Trust), which provides assistance to low-income countries. After accounting for risk management, administrative costs, and liquidity buffers, SDR 17.3 billion has been made available for lending—of which SDR 10.7 billion has been committed, leaving SDR 6.6 billion still unutilized (Figure 1). This uncommitted balance highlights both the potential and the challenges facing the RSF. Its design features—while prudent—may inadvertently restrict access for the countries most in need. RSF loans are highly concessional, with a long maturity of 20 years and a grace period of 10½ years. Given current financial conditions, these resources should have been drawn down more rapidly—were it not for the facility’s restrictive eligibility and access requirements.

In its May 2025 update on the RSF’s resource adequacy, the IMF projected that RSF commitments will exceed loanable resources by the end of 2026, with any shortfall covered by formalization of pending SDR recycling pledges. This implies that, absent a new fundraising effort, the RSF could effectively sunset next year. Given slowing demand and a currently limited pool of potential borrowers (the reasons for which are described below), we believe it is unlikely that the RSF will commit its remaining SDR 6.6 billion in this time frame. If it were to do so, it would entail larger programs—where RSF resources represent a smaller share relative to existing IMF programs, GDP, and overall vulnerability.

Possible ways to expand RSF use

The following reforms would enable the RSF to maximize the impact of its remaining SDR 6.6 billion for countries in financial need, while ensuring that its design remains consistent with IMF’s core mandate. Several of these suggestions were discussed in our earlier blog posts (see here and here).

1. Overcoming eligibility constraints: A key issue is the requirement that countries must have a concurrent upper credit tranche (UCT) program—involving agreed macroeconomic reforms—with at least 18 months remaining to qualify for RSF support. As of October 2025, there are 25 countries with a UCT but no RSF program (Figure 2), 14 of which are low-income countries. But many UCT countries are experiencing ongoing conflict or fragility (e.g., Burkina Faso, Nepal, Ukraine), financial stress (Argentina, Sri Lanka), or already had an RSF program that accessed maximum financing (Costa Rica, Morocco). We estimate that only 50 percent of current UCT countries would be both interested in and eligible for a new RSF program—unless small developing states (SDSs) are encouraged to implement a Policy Coordination Instrument. The fund should consider reevaluating RSF eligibility criteria, particularly for countries that have successfully completed a UCT and RSF program and would like to return for a successor RSF program to address further climate or health resilience needs without requiring a new UCT program.
2. Revisiting access limits: Under current rules, countries can borrow up to 150 percent of their IMF quota (their shareholding in the IMF) or a maximum of SDR 1 billion—whichever is lower. Of the RSF’s 26 borrowers, 14 have reached this ceiling, making them ineligible for successor programs even when financing needs persist. These limits also constrain SDSs, which have tiny quotas, despite their acute vulnerability to climate risks. Given the available capacity of the facility, revising access limits could help the RSF extend support that reflects the disproportionate risks faced by smaller climate-exposed economies. Increasing borrowing limits for SDSs would have negligible impacts on the RST’s financial stability while enabling those most exposed to severe climate shocks to strengthen their resilience.
3. Strengthening reform ambition: The RSF is meant to support ambitious policy reforms that build long-term resilience. However, evidence to date suggests that the scope and depth of reforms have been rising but are still not as much as in other IMF facility targeted at low-income countries. Our colleague Mary Svenstrup agrees and finds large variation in reforms across arrangements. Strengthening the substance, depth, consistency of reform measures within RSF programs would enhance their overall impact and ensure that the facility achieves its intended transformational objectives and is consistent with the primordial objectives of the IMF.
4. Integrating pandemic preparedness measures selectively: In July 2025, Jordan became the first (and still only) country to receive RSF financing also targeted at pandemic preparedness. This represents an important precedent. Just as with climate, health shocks can trigger profound macroeconomic dislocations, and embedding pandemic preparedness more systematically in the RSF’s operations would strengthen—not stretch—the facility’s mandate. Going forward, IMF staff should introduce pandemic-related reforms during scheduled program reviews, subject to country agreement and implementation capacity. Sixteen programs are due for review through March 2026, offering a window for such additions.
5. Strengthening coordination with the Pandemic Fund: Coordination between the RSF and the Pandemic Fund remains limited, despite the IMF–World Bank–WHO cooperation framework signed in 2024. Establishing formal coordinating mechanisms would help ensure that RSF-supported reforms complement Pandemic Fund investments in surveillance, laboratories, and health-system capacity.

Why is the RSF consistent with the IMF’s mandate?

An IMF Executive Board review of the RSF, originally scheduled for summer 2025, has been postponed to 2026. A key question for that review will be how to reform the facility while maintaining consensus among key IMF members. Given the US’s shareholding and influence, US views on climate and pandemic financing will weigh heavily in shaping any design adjustment.

At its core, the question is not whether the IMF should engage on climate or health issues, but how it can do so in ways that remain true to its macroeconomic mandate. The IMF’s concept of “macro-criticality” has always evolved: in the 1990s, social safety nets in IMF programs came to be viewed as macro-critical because they enhanced the political and social acceptability of reforms. Today, climate resilience and health preparedness have similarly far-reaching macroeconomic consequences, offering a strong rationale for IMF engagement. In 2021, the IMF Executive Board affirmed that climate change poses significant risks to the macroeconomic and financial stability of its members and should therefore be considered macro-critical.

To date, about 40 percent of RSF-supported reforms in climate transition relate to public financial management, 20 percent to climate mitigation, and the remainder to climate adaptation and climate finance. In Jordan’s program, three of four pandemic-related reforms center on strengthening fiscal systems—an appropriate emphasis given that fully executing health budgets has been a challenge in many countries. This distribution underscores that climate and pandemic-related reforms often have strong fiscal dimensions, reinforcing their consistency with the IMF’s macroeconomic mandate. More broadly, climate policies with significant macroeconomic implications should form part of the IMF’s regular policy advice.

Critics of the IMF’s climate focus have acknowledged that health should be considered essential. US Representative French Hill, for instance, urged the international financial institutions such as the IMF to prioritize “health, education, and poverty reduction”—suggesting that health and pandemic preparedness can fit within the IMF’s work program. At the same time, the fund should avoid imposing sector-specific conditions on climate that fall outside its core mandate, as highlighted by Mary Svenstrup in the case of Madagascar.

As the RSF approaches its review, the fund faces a delicate balancing act: expanding eligibility and access, deepening reform ambition, and clarifying how the facility fits within its core mandate. The priority should be to maximize the impact of remaining resources by channeling them to countries most vulnerable to climate and health shocks—particularly low-income and SDSs where RSF support can make the greatest difference. With SDR 6.6 billion still uncommitted, the fund should reinvigorate the RSF—and reaffirm its relevance and consistency with the IMF’s core mandate.

We wish to thank Helene Barroy, Benedict Clements, Kalipso Chalkidou, and Mark Plant for helpful suggestions.