Photo: Thermal scanners are set up in Kuala Lumpur International Airport to check temperatures of passengers amid COVID-19 outbreak on Mar 5, 2020. Malaysia is member country of the IDB. Naufal Zaquan/Shutterstock

Islamic Finance

Islamic Development Bank sets up $730 mln facility for member countries to cope with COVID-19 impact

The Islamic Development Bank has set up a $730 million ‘Strategic Preparedness and Response Facility’ to help member countries mitigate the socio-economic impact from the COVID-19.

“The SPRF funding will target interventions that focus on emergency preparedness and response to curb and contain the spread of the COVID-19, minimize socio-economic impact of the pandemic especially on the poor, and to build resilience of member countries in responding to outbreaks and pandemics,” said the IDB on Monday (Mar 16).

The Jeddah-based multilateral said the facility, for both public and private sectors, includes $280 million from the Bank and the Islamic Solidarity Fund for Development for sovereign projects and programmes, $300 million comes from the International Trade Finance Corporation for trade finance, and $150 million from ICIEC for insurance coverage.

“ITFC’s trade financing support shall be in the form of short-term rapid response initiatives  mainly aimed at enabling the member countries to purchase emergency COVID preparedness related medical equipment and supplies and medium term support to enable MCs and SMEs to recover from the impact of the crises,” said IDB.

ICIEC will provide credit and political risk insurance to sustain imports of strategic commodities, investment protection, and to minimize volatility.

“The [SPRF] facility will support strengthening of the health systems, funding of national epidemic preparedness and response plans, community awareness and education, disease surveillance, data collection and analysis, sustained provision of essential social services, provision of social safety nets, and support private sector activity,” said the multilateral.

Financing will be extended in the form of grants, concessional resources, trade finance, private sector lending and political and risk insurance coverage. 

IDB said it will also invest in research and development and provide technical assistance support for the development of innovative solutions to prevent and contain the pandemic, under its Science, Technology and Innovation Programme.

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