Debt relief agreement with the Republic of Côte d'Ivoire

Paris Club creditors agreed with the Government of the Republic of Côte d'Ivoire to alleviate its external public debt on 15th November 2011, following the approval by the International Monetary Fund (IMF) of a new three year arrangement under the Extended Credit Facility on 4th November 2011. Participating creditors noted that following the crisis that the Republic of Côte d'Ivoire has gone through, the Government has quickly revived economic activity and resumed negotiations with the Paris Club.

The agreement was concluded under the so called "Cologne terms" designed by the Paris Club for the implementation of the HIPC initiative interim debt relief.

On an exceptional basis, considering the Republic of Côte d'Ivoire's limited capacity of payment, creditors have also agreed to defer and reschedule over a ten-year period the repayment of maturities due by the Republic of Côte d'Ivoire on short term and post-cut off date debts; and, over an eight-year period the arrears on those claims. They also agreed to defer all the interest due on the amounts treated.

Participating creditors welcomed that these measures are expected to reduce the debt service (including the arrears) due by the Republic of Côte d'Ivoire to Paris Club creditors between 1st July 2011 and 30 June 2014 by more than 78% which corresponds to 1 822 million USD, of which 397 million USD cancelled.

The Government of the Republic of Côte d'Ivoire has committed to devote the resources that otherwise would have gone to Paris Club creditors to priority areas identified in the country's Poverty Reduction Strategy. The Government of the Republic of Côte d'Ivoire has also committed to seek comparable treatment from its private and non-Paris Club bilateral creditors.

It is resolutely implementing its reform program, which should allow it to reach the Completion Point of the enhanced HIPC initiative as soon as possible, and thereby obtain the final component of relief on its debt by Paris Club creditors.

Background notes

1. The Paris Club was formed in 1956. It is an informal group of creditor governments from major industrialized countries.

2. The members of the Paris Club which participated in the restructuring of the Republic of Côte d'Ivoire's debt were representatives of the governments of Austria, Belgium, Canada, France, Germany, Italy, Japan, the Netherlands, Norway, Spain, Switzerland, the United Kingdom and the United States of America. Brazil also participated in this reorganization.

Observers at the meeting were representatives of the government of the Russian Federation, as well as the International Monetary Fund, the International Development Association, the African Development Bank, the European Commission and the Secretariat of the UNCTAD.

3. The delegation of the Republic of Côte d'Ivoire was headed by Mr. Charles Koffi DIBY, Minister of Economy and Finance. The meeting was chaired by Mr. Remy RIOUX, Vice Chairman of the Paris Club.

Technical notes

1. The Republic of Côte d'Ivoire's economic program is supported by a three year Arrangement under the Extended Credit Facility approved by the International Monetary Fund on 4th November 2011. The Republic of Côte d'Ivoire reached the Decision Point under the enhanced Heavily Indebted Poor Countries (HIPC) Initiative in March 2009.

2. The stock of debt owed to Paris Club creditors by the Republic of Côte d'Ivoire as of 1st July 2011 was estimated to be more than USD 7.185 million in nominal terms.

3. The cut-off date (1st July 1983 for the Côte d'Ivoire) is defined when a debtor country first meets with Paris Club creditors. The cut-off date is designed to protect credits granted by Paris Club creditors after this date. It is not changed in subsequent Paris Club treatments. In accordance with Paris Club rules, credits granted after this cut-off date are in principle not subject to rescheduling or cancellation.

4. In accordance with Cologne terms, the credits granted under Official Development Assistance conditions before the cut-off date are to be repaid over 40 years, with 16 years of grace, at interest rates at least as favourable as the original concessional rates applied to those loans. Regarding commercial credits, 90% of the pre-cut off date debt is cancelled, the remaining amounts being rescheduled over 23 years, with 6 years of grace.