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The IMF on Tuesday agreed to a deal to provide aid to Costa Rica under the newly-created fund aimed at helping low-income countries tackle the impacts of climate change.
A team from the Washington-based lender agreed with the Central American nation's government to provide $710 million under the Resilience and Sustainability Trust (RST) launched earlier this year -- only the second country to receive funding.
In addition, the International Monetary Fund mission agreed on the latest review of the country's performance under an existing, $1.8 billion loan program, which will allow release of the next $264 million disbursement, once approved by the fund's board.
Costa Rica was the first member country to formally request financing under the RST, although IMF staff announced the inaugural deal last week with Barbados.
"The new facility would support Costa Rica's pioneering efforts to assess climate risks, decarbonize its economy, (and) strengthen infrastructure resilience," IMF mission chief Manuela Goretti said in a statement.
The IMF aims to mobilize $45 billion for the RST with contributions from member governments and provide 20-year loans available to about 140 low- and middle-income nations eligible for the funding.
Goretti praised the government's economic reform efforts including reducing the budget deficit and strengthening debt sustainability "even as they provide greater support to address the impact of rising inflationary pressures on the most vulnerable."
She also welcomed the central "decisive move" to tighten monetary policy to combat rising prices, but warned about risks to the economic outlook.
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