Possibility to conduct debt swaps

On a voluntary and bilateral basis, the Government of each Participating Creditor Country or its appropriate institutions may sell or exchange, in the framework of debt for nature, debt for aid, debt for equity swaps or other local currency debt swaps : (i) all ODA loans ; (ii) amounts of outstanding credits, loans and consolidations on debts [treated in the present Agreed Minute] other than official development aid loans, up to 20% of the amounts of outstanding credits as of December 31, 1991 or up to an amount of 40 million dollars of the United States of America, whichever is higher. Participating creditor countries and the United Republic of Tanzania will inform semi-annually the Secretariat of the Paris Club, who will inform other Creditors, of the debt swap agreements they have implemented. All elements necessary to evaluate the operation, its impact on Tanzania's economy and on the evolution of creditor's exposure will be transmitted to the Secretariat, including : its nature and purpose ; the parties to the debt swap ; the amount, type and value of the debt treated ; the price of sale to investors and the expense of the United Republic of Tanzania.

Good will clause

Given the decision by Paris Club Creditors to contribute to the exceptional assistance in favor of the United Republic of Tanzania under the enhanced Debt Initiative for the Heavily Indebted Poor Countries (HIPC), the Participating Creditor Countries declare their readiness in principle to hold at completion point a meeting designed to examine the question of the United Republic of Tanzania's outstanding debt stock and to make the necessary effort, in favor of the United Republic of Tanzania to reach the objective of its debt sustainability in the context of an equitable burden sharing among creditors, provided that :

- the United Republic of Tanzania maintains satisfactory relations with participating Creditor Countries, fully implements all the agreements signed with them and maintains a sound adjustment track record ;

- the Boards of the International Monetary Fund and the World Bank decide that the United Republic of Tanzania has reached its completion point under the enhanced Debt Initiative for the Heavily Indebted Poor Countries.

Free transferability provision

The Government of the United Republic of Tanzania will take the relevant administrative measures or extend existing measures to ensure that private debtors in Tanzania will be permitted to pay into the Bank of Tanzania or its designated agents, the local currency counterpart of their obligations past due or falling due, corresponding to their debt of any nature owed to or guaranteed by the Participating or Observer Creditor Countries or their appropriate institutions.

Special account

To facilitate the implementation of this Agreed Minute, the Government of the United Republic of Tanzania will deposit in the special account established with the Bank of England, the equivalent of at least SDR 300,000 at the end of each month, commencing in May 2000 through March 2003 inclusive. The Government of the United Republic of Tanzania undertakes to have this Bank notify the Chairman of the Paris Club as soon as each deposit has been made. The total amount approximates the amounts estimated to be payable to all Participating Creditor Countries from December 1, 1999 up to March 31, 2003 inclusive under the terms of the bilateral agreements to be concluded pursuant to this Agreed Minute. As specific payments under these agreements become due, the Government of the United Republic of Tanzania will draw on the special account to meet these payments ; no drawing will be made on the special account for any other use before all payments due from December 1, 1999 up to March 31, 2003 inclusive under these agreements have been made. Any drawing on this account will be made after a previous 15-day notice to the above Bank, which this Bank will notify immediately to the Chairman of the Paris Club. This scheme could be continued by agreement between the parties.

Phases

• First phase : From April 01, 2000 up to March 31, 2001, implemented at the signature of the agreement
• Second phase : From April 01, 2001 up to March 31, 2002, implemented on April 26, 2001
• Third phase : From April 01, 2002 up to March 31, 2003, implemented on July 16, 2002

De minimis threshold of 500 000 SDR

Payment of non-consolidated amounts before November 30, 2000