As a significant risk-mitigation measure for Muslim-majority countries, the Islamic Development Bank (IsDB) has announced that it is setting up a $730m emergency response facility to support its 57 member countries in mitigating the health and socio-economic fallout resulting from the COVID-19 pandemic.
Significantly, $150m of this total will come from the Islamic Corporation for the Insurance of Investment and Export Credit for credit and political risk insurance coverage to sustain imports of strategic commodities, protect investments and minimise volatility.
The aid package will also include $280m from IsDB and Islamic Solidarity Fund for Development for sovereign projects and programmes and $300m from International Islamic Trade Finance Corporation for trade finance.
The facility will extend financing to both the public and private sector in the form of grants, concessional resources, trade finance, private sector lending, and political and risk insurance coverage. The IsDB Group will deploy all the available financing instruments to channel funds quickly to support its members which include Algeria, Bahrain, Egypt, Iran, Iraq, Jordan, Kuwait, Lebanon, Morocco, Oman, Palestine, Qatar, Saudi Arabia, Tunisia, Turkey, UAE and Yemen.
Called the ‘Strategic Preparedness and Response Facility’, the funding will focus on emergency preparedness and response to curb and contain the spread of COVID-19, minimise socio-economic impact of the pandemic especially on the poor and to build resilience of member countries in responding to outbreaks and pandemics.
IsDB has also approached donors and development partners including Arab Coordination Group to mobilise resources to support the member countries. Other organisations such as Asia Infrastructure Investment Bank, OPEC Fund for International Development, Saudi Fund, and Kuwait Fund for Development have also expressed interest in joining the bank’s response efforts.