Exogenous Shocks Facility- High Access Component (ESF-HAC)
February 11, 2021
The Exogenous Shocks Facility-High Access Component (ESF-HAC), which was established in 2008, has provided concessional financing to Poverty Reduction and Growth Trust (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make the Fund’s financial support more flexible and better tailored to the diverse needs of LICs, the ESF-HAC has been superseded by the Standby Credit Facility (SCF), which became effective in January 2010. Currently, no credit is outstanding from ESF-HAC arrangements.
Access was determined on a case-by-case basis. The ESF-HAC provided access up to 75 percent of quota for each arrangement in normal circumstances. Resources were provided in phased disbursements based on reviews, and programs were one-to-two years in length.
The country’s economic program under the ESF 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 end-June 2021, with repayments made semiannually, beginning 5½ years and ending 10 years after the disbursement. On May 24, 2019, the Executive Board decided to waive interest rate charges on outstanding balances under the Exogenous Shocks Facility until the next review of the interest rate mechanism. The Fund reviews the level of interest rates for concessional facilities every two years with the next review expected to take place by mid-2021.