© . FILE PHOTO: The International Monetary Fund logo is seen in headquarters at the end of the IMF/World Bank annual meetings in Washington, US, on Oct. 9, 2016. REUTERS/Yuri Gripas By Andrea Shalal WASHINGTON () -The International Monetary Fund’s Governing Council on Wednesday approved the creation of a new facility to help low-income countries and most middle-income countries deal with longer-term challenges such as climate change and pandemics. IMF director Kristalina Georgieva announced in a statement after the board meeting the approval of the new Resilience and Sustainability Trust and said it would take effect from May 1 with the goal of raising at least $45 billion. She said the trust would amplify the impact of last year’s IMF allotment of $650 billion special drawing rights by allowing wealthier members to channel their emergency reserves to empower vulnerable countries to face longer-term challenges. that threatened their economic stability. “This historic decision embodies the spirit of multilateralism,” she said in a statement to . “It shows that when there is a need and there is a will, we can work together to achieve a significant result for the benefit of all.” IMF staff have been trying out details about the new facility in recent months after it won backing from the Group of 20 major economies in October. An IMF staff document prepared for the board and reviewed by said nearly three-quarters of the IMF’s 190 members would be eligible to borrow from the RST, the IMF’s first facility set up expressly to help countries managing balance of payments risks arising from longer. long-term challenges, the paper said. Today, even as IMF member countries face the immediate challenges of rising inflation, limited fiscal space and pandemic recovery – exacerbated by the risks associated with the war in Ukraine – they are also calling on the Fund to help respond to longer-term challenges such as climate change and pandemic preparedness,” the paper said. Currently, the IMF provides cheap and interest-free financing to help countries cope with short-term challenges such as capital flight, inflation or high commodity prices, and medium-term fiscal and financial challenges. But until now, a facility to help countries manage balance of payments risks from long-term threats has been lacking, and the Poverty Reduction and Growth Trust has only been open to low-income countries. First proposed by Georgieva last June, the RST will fill those gaps and provide a wider range of countries with affordable financing over longer repayment periods, with a 20-year maturity and a grace period of 10-1/2 years. The IMF has said it plans to begin lending under the program in October. The funding will be available to low-income and most middle-income countries, including all small developing countries, the IMF said. Many of those states were particularly hard hit by the pandemic and its economic impact. To qualify for loans from the new RST, countries must still develop “credible policies and reforms”, have sustainable debt and sufficient capacity to repay the IMF, and be part of a concurrent financing or non-financing program of the IMF, such as its policy coordination arrangements with Serbia, Rwanda and other countries. The IMF staff document states that the eligibility criteria are designed to balance the needs of creditors and debtors while limiting financial risks to the fund. The funding is also expected to serve as a catalyst for additional funding from the private sector, donors and other international financial institutions, the IMF said. It said close cooperation with the World Bank and other international financial institutions would be critical to the success of the RST.