Agreement to a debt restructuring for Ecuador

The Paris Club agrees on a stock of debt reduction of $145 million.

This agreement will ensure the sustainability of Uganda's external debt.

On September 15, 2000, the Paris Club of creditors concluded an agreement with the Government of the Republic of Ecuador to consolidate roughly $880 million in arrears and amounts falling due to official bilateral creditors until April 30, 2001. In conjunction with Ecuador's successful debt exchange of Eurobonds and Brady bonds, the Paris Club rescheduling is expected to fully satisfy Ecuador's financing requirements for the year. In addition, looking forward to Ecuador's negotiation of a follow-on program with the IMF, the Paris Club creditors also agreed in principle to review the case for a further restructuring of their claims falling due after April 30, 2001.

The Paris Club agreement comes on the heels of the International Monetary Fund's successful first review under Ecuador's Fund program. The consolidation is expected to make an important positive contribution to Ecuador's economic outlook. To further this objective, part of the Paris Club creditors' financing will support the Government's high priority programs, supported by international financial institutions, thus enhancing the country's medium-term prospects for recovery.

The rescheduling is conducted under the so-called "Houston terms" : non-ODA credits are to be repaid over 18 years, with 3 years of grace and progressive payments, at the appropriate market rate ; ODA credits are to be repaid over 20 years, with 10 years of grace, at a rate at least as favourable as the concessional rates applying to those loans.

On a voluntary and bilateral basis, each creditor may also undertake debt for nature, debt for aid, debt for equity swaps or other debt swaps.