Accorded treatment
Agreement on the Debt service suspension Initiative (DSSI)
Amendment under the extension of the DSSI signed on 2 February 2021
Categories of debt treated
1/ Treatment of arrears as of April 30, 2020 and maturities falling due from May 01, 2020 up to December 31, 2020
2/ Treatment of maturities from January 01, 2021 up to June 30, 2021
Repayment profile
Treatment under Ad Hoc terms
Duration of the suspension of payment:
- from May 1st, 2020 until end- 2020
- from January 1st, 2021 to June 30, 2021
Perimeter of maturities and cut-off date
- Suspension of principal repayments and interest payments
- Cut-off date protecting new financing in case of possible future restructuring: March 24, 2020
Modalities for the debt service suspension
NPV-neutral for the suspension of payments
Repayment period:
- 3 years with a one-year grace period (4 years total)
- 5 years, with a one-year grace period (6 years total)
Treatment will be achieved either through rescheduling or refinancing.
Specific provisions
The Government of the Republic of Madagascar is required to commit :
- to use the created fiscal space to increase social, health or economic spending in response to the crisis. A monitoring system is expected to be put in place by the IFIs;
- to disclose all public sector financial commitments (debt) , respecting commercially sensitive information. Technical Assistance is expected to be provided by the IFIs as appropriate to achieve this;
- to comply with the debt limits on contracting new non-concessional during the suspension period agreed under the IMF Debt Limit Policy (DLP) or WBG policy.
Good will clause
If the Government of the Republic of Madagascar has fulfilled all its commitments under the Memorandum of Understanding dated October 12, 2020, and its Amendment dated February 2, 2021, the Participating Creditor Countries declare their intention to consider before July 1st, 2021 a revision of the Memorandum of Understanding and its Amendment in order to possibly extend the period during which payments due on concerned debts are to be deferred, if the economic and financial situation requires to extend further the Debt Service Suspension Initiative.
Comparability of treatment provision
The Government of the Republic of Madagascar commits to seek from all its other bilateral official creditors a debt service treatment that is in line with the agreed term sheet providing the key features of the time-bound suspension of debt service payments initiative set out in Annex I and commits not to accord any of these creditors a treatment more favourable.
Organisation of the session
The agreement was signed by Mr. Guillaume CHABERT, Co-Chairman of the Paris Club. The head of the debtor country was Mr. Richard RANDRIAMANDRATO, Minister of Economy and Finance.
The amendment was signed by Mr. Christophe BORIES, Vice-Chairman of the Paris Club. The head of the debtor country was Mr. James ichard RANDRIAMANDRATO, Minister of Economy and Finance.
- AUSTRALIA, AUSTRIA, BELGIUM, BRAZIL, CANADA, DENMARK, FINLAND, GERMANY, IRELAND, ISRAEL, ITALY, NETHERLANDS, NORWAY, SWEDEN, SWITZERLAND, UNITED KINGDOM, UNITED STATES OF AMERICA
Files attached
20201012_pr_dssi_madagascar.pdf (116.21 KB) 20210202_pr_dssi_madagascar_extension.pdf (116.29 KB)