Conference of the Parties (COP28): International support grows for channeling the International Monetary Fund (IMF) Special Drawing Rights through multilateral development banks

Conference of the Parties (COP28): International support grows for channeling the International Monetary Fund (IMF) Special Drawing Rights through multilateral development banks

Conference of the Parties (COP28): International support grows for channeling the International Monetary Fund (IMF) Special Drawing Rights through multilateral development banks
Conference of the Parties (COP28): International support grows for channeling the International Monetary Fund (IMF) Special Drawing Rights through multilateral development banks

African Development Bank Group (AfDB)

Governments of France, Japan, Spain and the UK express support for use of hybrid SDR instrument  to provide development resources to countries in need in Africa and Latin America and the Caribbean; IMF staff confirms reserve asset status of the innovative solution by the African Development Bank ( and Inter-American Development Bank to channel SDRs to Multilateral Development Banks and signals readiness to bring SDR hybrid capital proposal to the IMF’s Executive Board soon.

The governments of France, Japan, Spain and the United Kingdom together with Brazil (the incoming G20 Presidency), the International Monetary Fund, the United Nations, ministers from Africa and Latin America, the Asian Development Bank and other international institutions pledged strong support for a proposal by the African Development Bank Group (AfDB) and the Inter-American Development Bank (IDB) for the channeling of special drawing rights (SDRs) through multilateral development banks (MDBs).

Speaking at a special roundtable convened at the COP28 in Dubai on Monday 4 December to discuss leveraging SDRs for climate and development, the participants commended the two banks for their innovative proposal that would deliver much-needed financial resources to vulnerable countries.

The meeting was co-hosted by the COP28 Presidency, AfDB, the IDB, the Government of France, and the Government of Japan, with support from the Rockefeller Foundation.

The IMF issued a historic general allocation of SDRs worth $650 billion in 2021 to help countries deal with the impact of a global crisis triggered by the Covid-19 pandemic. Africa, with a population of more than 1.2 billion, received only $33 billion representing about 5 percent of the total allocation, the smallest portion among the different regions of the world. Similarly, Latin America and the Caribbean received only 8 percent of the total allocation.

The African Union at its meeting of Heads of State in February 2022 urged wealthy nations to increase the SDR allocation to the continent to at least $100 billion and channel part of them through the African Development Bank. The channeling of SDRs through the MDBs strongly aligns with and was incorporated into the MDB Vision Statement issued at the Summit on the Paris Pact for People and Planet held in June 2023.

The African Development Bank and the Inter-American Development Bank have developed an innovative mechanism that will be structured as a hybrid capital instrument and can therefore be accounted for as equity on the AfDB’s and IDB’s balance sheets. It is also underpinned by a Liquidity Support Agreement between contributing shareholders, to ensure that SDR-contributing countries can still account for these as reserves.

Speaking at the roundtable, the African Development Bank’s President Dr. Akinwumi Adesina reiterated the benefits of channeling the SDRs through MDBs. He said, “MDBs can multiply the channeled SDRs by at least four times their original values.” This multiplier effect means that $5 billion of channeled SDRs could be transformed into $20 billion of new financing.

Adesina added: “This will transform the SDRs from static foreign reserve assets into dynamic lending instruments, at affordable costs, to finance development, while preserving their reserve asset status, and be at zero cost to taxpayers in SDR-rich countries.”

Inter-American Development Bank President Ilan Goldfajn highlighted the important progress in the discussion around SDRs channeling and said: “SDRs are critical to help us advance our climate agenda, and to scale up investments for climate mitigation and adaptation in our member countries. We welcome the progress made towards rechanneling of SDRs with the liquidity pledges by France, the support expressed by Japan, the UK and Spain through the SDR hybrid capital instrument and the IMF’s readiness to send a proposal to its Executive Board soon. Going forward, it will be crucial to have the commitment of at least five more investors to make this instrument a reality and start channeling SDRs through MDBs.”

The IMF Deputy Managing Director Bo Li congratulated the two banks for developing a concrete proposal, saying, “Based on our staff assessment, the hybrid capital instrument proposed by AfDB and IDB… would meet the reserve asset quality requirements.”

“Successful implementation of the proposal would be an important contribution to amplify the positive impact of the historic 2021 SDR allocation for the benefit of developing countries,” said Li. He also noted that the IMF is working at pace to finalize all required approvals, with these processes already well advanced and expected be completed and sent to the board in the near future.

The government of Japan announced that it “will be accelerating its best efforts to make a contribution to the proposed hybrid capital.”

The country’s Deputy Director General in the Ministry of Finance Tomoyoshi Yahagi said the proposal by the two banks “is a great opportunity by MDBs to show strong partnership with their member countries to deliver the most needed financial resources to achieve Sustainable Development Goals.”

The Director General of the French Treasury Emmanuel Moulin said from the beginning his country had been a strong supporter of SDR reallocation.

“AfDB and IDB have put forward a very solid proposal for the channeling of SDRs through a hybrid capital instrument with the help of IMF… for the benefit of countries most in need.”

Moulin said that “France is ready to support the SDR hybrid capital proposal through the Liquidity Support Agreement, by providing a guarantee.”

Spain expressed similar support for the SDR initiative. Spain’s First Deputy Prime Minister and Minister for Economy, Trade and Enterprises, Nadia Calvino who is also the chair of the International Monetary and Financial Committee of the IMF, said that her country “has been in the lead to reinforce the firepower of multilateral institutions and the creation of new instruments which are fit for purpose. Channeling SDRs is one of the instruments we should work on.”

The United Kingdom commended the African Development Bank and the Inter-American Development Bank “for these innovative proposals to maximize the value of SDR channeling,” said Andrew Mitchell, Minister of State for Development and Africa. He mentioned the United Kingdom will be “exploring the possibility of augmenting the SDR facility with a liquidity support agreement.”

He added, “The UK is a firm champion and supporter of the African Development Bank and its outstanding President. And I sincerely hope that with further detailed work, this channeling proposal can be delivered, benefiting those countries most in need of support.”

The UN’s Under Secretary General for Economic and Social Affairs Li Junhua said the proposal by the African Development Bank and the Inter-American Development, “deserves all our support. The UN calls on countries with unused SDRs to show their support and conclude contribution agreements with the African Development Bank and the Inter-American Development Bank.”

The Government of Brazil confirmed that efforts to rechannel SDRs through MDBs to expand climate and development finance will form part of the agenda for their G20 Presidency.

Sir Alok Sharma, a Climate and Finance Fellow at the Rockefeller Foundation and the former COP26 President, spoke with urgency in support of the proposal saying, “We can overcome the technical barriers. This event demonstrates a vital ingredient: political will. We all talk about the millions, the billions and the trillions, but that doesn’t mean anything to people living on the front lines of climate change. This is about supporting the most vulnerable people in the world. Please don’t fail them.”

Alvaro Lario, the president of the International Fund of Agricultural Development, a prescribed holder of the SDRs to support farmers, said, “The solutions have been provided and what is now needed is the political breakthrough.”

Supportive remarks were also made by senior government officials from Kenya, Senegal, Brazil Argentina and the Asian Development Bank.

President Adesina’s speech (

Distributed by APO Group on behalf of African Development Bank Group (AfDB).

Communication and External Relations Department,

About the African Development Bank Group:
The African Development Bank Group is Africa’s premier development finance institution. It comprises three distinct entities: the African Development Bank (AfDB), the African Development Fund (ADF) and the Nigeria Trust Fund (NTF). On the ground in 41 African countries with an external office in Japan, the Bank contributes to the economic development and the social progress of its 54 regional member states. For more information: