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Monday, August 29, 2011
IMF - The Exogenous Shocks Facility- High Access Component (ESF-HAC)
The Exogenous Shocks Facility- High Access Component (ESF-HAC) March 31, 2011
"The Exogenous Shocks Facility-High Access Component (ESF-HAC), which was established in 2008, provides concessional financing to PRGT-eligible countries facing balance of payments needs caused by sudden and exogenous shocks. As part of a broader reform to make the Fund’s financial support more flexible and better tailored to the diverse needs of LICs, the ESF-HAC has been superseded by the Standby Credit Facility (SCF). Existing ESF-HAC arrangements will remain in effect until their expiration or cancellation. Current ESF-HAC terms will also continue to apply to these arrangements.
Access is determined on a case-by-case basis. The ESF-HAC providesaccess up to 150 percent of quota for each arrangement in normal circumstances. Resources are provided in phased disbursements based on reviews, and programs are one-to-two years in length.
The country’s economic program under the ESF should be focused on adjustment to the underlying shock, with less emphasis on the broad structural adjustment that often characterizes other IMF-supported programs. The ESF could be used concurrently with the Policy Support Instrument (PSI).
ESF loans carry a zero annual interest rate until 2011, with repayments made semiannually, beginning 5½ years and ending 10 years after the disbursement. The Fund reviews the level of interest rates for all concessional facilities every two years."