Notification of Effectiveness of Partial Distribution of the General Reserve Attributed to Windfall Gold Sale Profits

On February 24, 2012, the Executive Board approved a partial distribution of the general reserve equivalent to SDR 700 million attributed to part of the gold sales windfall profits to all members in proportion to their quotas.

Abstract

On February 24, 2012, the Executive Board approved a partial distribution of the general reserve equivalent to SDR 700 million attributed to part of the gold sales windfall profits to all members in proportion to their quotas.

1. On February 24, 2012, the Executive Board approved a partial distribution of the general reserve equivalent to SDR 700 million attributed to part of the gold sales windfall profits to all members in proportion to their quotas (Decision No. 15092-(12/19), the “Distribution Decision”).1

2. In accordance with paragraph 5 of the Distribution Decision, the distribution will only become effective when I have notified the Executive Board that, in my assessment, satisfactory assurances exist regarding the availability of at least SDR 630 million for new subsidy contributions to the Poverty Reduction and Growth Trust (PRGT) based on: (a) the amount that members have requested in writing be transferred as subsidy contributions to the PRGT from their share in the partial distribution; (b) the amount of other new contributions that members have provided as subsidy contributions to the PRGT in light of the Distribution Decision; and (c) the amount of other subsidy contributions that members have given written assurances that they will provide to the PRGT in light of the Distribution Decision.

3. I am pleased to notify the Executive Board that the required satisfactory financing assurances have been secured—as of today, October 12, 2012, satisfactory financing assurances have been received from 134 members regarding the availability of SDR 632.46 million (90.35 percent of the distribution) for new PRGT subsidy contributions (Appendix Table). Accordingly, the relevant provisions of the Distribution Decision are effective as of today.

Appendix Table.

Assurances of PRGT Subsidies Related to the Partial Distribution of SDR 700 million of General Reserves 1/

(As of October 12, 2012)

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The amounts distributed are based on the quota for each member on the day of the notification of the effectiveness of the partial distribution. The amounts shown in this table are rounded to two decimal places.

Botswana, Bulgaria, Burundi, Malawi, and Maldives pledged 90 percent of their share of the distribution; Belgium pledged 75 percent; Croatia, Lesotho and Slovenia pledged 50 percent.

4. The distribution amounts for each member are shown in the Appendix Table, and are based on members’ quotas as of today. The relevant transfers are expected to be made on October 24, 2012, which would allow time for the standard communications with members’ fiscal agents on operational aspects of the distribution.2 Consistent with paragraph 4 of the Distribution Decision, the proceeds from the reduction of the amount of investment in the Investment Account equivalent to SDR 700 million will be transferred to the General Resources Account (GRA) on the same day the distribution is made.

5. This is an important milestone towards completing the 2009 financing package to support the Fund’s concessional lending to low-income countries (LICs), and I want to express my utmost gratitude to the many and diverse members that have expressed their support in this way. A number of members have not yet communicated to the Fund their decision regarding a contribution of equivalent amounts of their share of the distribution as new subsidies to the PRGT, and staff will remain in close contact with those members with the goal of maximizing the PRGT’s lending capacity. Further updates will be provided to the Board in due course.

1

See Partial Distribution of the General Reserve Attributed to Windfall Gold Sale Profits (2/1/2012).

2

Similar operational modalities were followed for the partial distribution of SCA-1 balances and deferred charges for the financing of Liberia’s debt relief in March 2008.

Notification of Effectiveness of Partial Distribution of the General Reserve Attributed to Windfall Gold Sale Profits
Author: International Monetary Fund