In application of the term sheet of the Debt service suspension Initiative (DSSI) and its addendum also endorsed by the G20, the Paris Club recognized that the Federal Democratic Republic of Ethiopia is eligible to benefit from the extension of the initiative. Therefore, the representatives of the Paris Club Creditor Countries have accepted to provide to t the Federal Democratic Republic of Ethiopia an extension of the time-bound suspension of debt service due from 1^st January to 30^th June 2021.

The Government the Federal Democratic Republic of Ethiopia is committed to devote the resources freed by this initiative to increase spending in order to mitigate the health, economic and social impact of the COVID19-crisis. The Government of the Federal Democratic Republic of Ethiopia is also committed to seek from all its other bilateral official creditors a debt service treatment that is in line with the agreed term sheet and its addendum. This initiative will also contribute to help the Federal Democratic Republic of Ethiopia to improve debt transparency and debt management.

Paris Club creditors will continue to closely coordinate with non-Paris Club G20 creditors and other stakeholders in the ongoing implementation of the DSSI and its extension, so as to provide maximum support to beneficiary countries.

Background notes

1. The Paris Club was formed in 1956. It is an informal group of official creditors whose role is to find coordinated and sustainable solutions to the payment difficulties experienced by borrower countries.

2. The members of the Paris Club which participate in the reorganization of the Federal Democratic Republic of Ethiopia’s debt are the governments of France, Italy, Japan, the Republic of Korea and the Russian Federation.

Observers to the agreement are representatives of the governments of Australia, Austria, Belgium, Brazil, Canada, Denmark, Finland, Germany, Ireland, Israel, the Netherlands, Norway, Spain, Sweden, Switzerland, the United Kingdom and the United States of America.

Credit AdobeStock©rudiernst

In application of the term sheet of the Debt service suspension Initiative (DSSI) and its addendum also endorsed by the G20, the Paris Club recognized that the Commonwealth of Dominica is eligible to benefit from the extension of the initiative. Therefore, the representatives of the Paris Club Creditor Countries have accepted to provide to the Commonwealth of Dominica an extension of the time-bound suspension of debt service due from 1^st January to 30^th June 2021.

The Government of the Commonwealth of Dominica is committed to devote the resources freed by this initiative to increase spending in order to mitigate the health, economic and social impact of the COVID19-crisis. The Government of the Commonwealth of Dominica is also committed to seek from all its other bilateral official creditors a debt service treatment that is in line with the agreed term sheet and its addendum. This initiative will also contribute to help the Commonwealth of Dominica to improve debt transparency and debt management.

Paris Club creditors will continue to closely coordinate with non-Paris Club G20 creditors and other stakeholders in the ongoing implementation of the DSSI and its extension, so as to provide maximum support to beneficiary countries.

Background notes

1. The Paris Club was formed in 1956. It is an informal group of official creditors whose role is to find coordinated and sustainable solutions to the payment difficulties experienced by borrower countries.

2. The members of the Paris Club which participate in the reorganization of the Commonwealth of Dominica’s debt are the governments of France and the United Kingdom.

Observers to the agreement are representatives of the governments of Australia, Austria, Belgium, Brazil, Canada, Denmark, Finland, Germany, Ireland, Israel, Italy, Japan, the Netherlands, Norway, the Republic of Korea, the Russian Federation, Spain, Sweden, Switzerland and the United States of America.

Credit AdobeStock©ingalin

As of today, 38 eligible countries have requested to benefit from the Debt Service Suspension Initiative (DSSI)[1] by the Paris Club. Of these requests, 36 have already signed a Memorandum of Understanding with the Paris Club creditors to implement the DSSI. These countries are: Angola, Burkina Faso, Cabo Verde, Cameroon, Chad, Comoros, Congo (Democratic Republic of), Congo (Republic of), Djibouti, Dominica, Ethiopia, Grenada, Guinea, Ivory Coast, Kyrgyz Republic, Lesotho, Madagascar, Maldives, Mali, Mauritania, Mozambique, Myanmar, Nepal, Niger, Pakistan, Papua New Guinea, Samoa, São Tomé and Príncipe, Saint Lucia, Senegal, Sierra Leone, Tajikistan, Tanzania, Togo, Yemen and Zambia. For Cabo Verde and São Tomé and Príncipe, Portugal, which is not member of the Paris Club, signed jointly with the Paris Club creditors both Memoranda of Understanding implementing the DSSI.

For these 36 countries, the total deferred amounts agreed by Paris Club creditors thanks to the DSSI - also including the deferment of arrears that pre-existed the implementation of the DSSI - reaches USD 2.5 billion (Cf. Appendix).

Paris Club creditors will continue to closely coordinate with non-Paris Club G20 members and other stakeholders in the ongoing implementation of the DSSI and its extension, so as to provide maximum support to beneficiary countries. After having agreed to extend the DSSI by six months until 30 June 2021, Paris Club members will examine by the time of the 2021 IMF/WBG Spring Meetings if the economic and financial situation requires to extend further the DSSI by another six months.

Furthermore, Paris Club members have endorsed a “Common Framework for Debt Treatments beyond the DSSI” and welcome the decision taken by the extraordinary G20 Finance Ministers and Central Bank Governors’ Meeting to also endorse this Common Framework. Recognizing that efficiently addressing ongoing debt vulnerabilities will require a strong creditors’ coordination, the Common Framework sets out a multilateral approach to facilitate debt treatments for DSSI-eligible countries by Paris Club and G20 creditors in a timely, coordinated and orderly manner, while ensuring a broad participation among creditors, including the private sector through the comparability of treatment principle. This Framework represents a major breakthrough in the international financial architecture and will strengthen the coordination between Paris Club creditors and other G20 creditors at a time when debt vulnerabilities are high, particularly in low-income countries.

“The Paris Club has worked actively to implement swiftly the DSSI in order to respond without delay to requests from eligible countries. It has once again proven its effectiveness and ability to coordinate closely with non-Paris Club G20 members. To meet the current debt challenges many countries are facing, the Paris Club continues to show its leadership in designing and implementing multilateral initiatives on debt issues. It remains strongly committed to implementing the DSSI extension and the Common Framework in the coming months.” says Emmanuel Moulin, Chairperson of the Paris Club.

Background notes

1. The Paris Club was formed in 1956. It is an informal group of official creditors whose role is to find coordinated and sustainable solutions to the payment difficulties experienced by borrower countries.

2. The members of the Paris Club are the governments of Australia, Austria, Belgium, Brazil, Canada, Denmark, Finland, France, Germany, Ireland, Israel, Italy, Japan, the Netherlands, Norway, the Republic of Korea, the Russian Federation, Spain, Sweden, Switzerland, the United Kingdom and the United States of America.

[1] One request received by the Paris Club has not being considered as eligible to DSSI.

Paris Club members acknowledge the COVID-19 health and economic crisis is significantly increasing the debt vulnerabilities of the poorest and most vulnerable countries. In such a context, Paris Club members consider a multilateral approach, consistent with its principles and coordinated with non-Paris Club creditors, to be critical in providing appropriate debt treatment beyond the Debt Service Suspension Initiative (DSSI) on a case-by-case basis.

For that purpose, Paris Club members have agreed a “Common Framework for Debt Treatments beyond the DSSI” and welcome the decision taken today (13 November 2020)  by the extraordinary G20 Finance Ministers and Central Bank Governors’ Meeting to endorse this Common Framework (Annex). It is a major achievement in the international debt architecture to strengthen coordination among official bilateral creditors. 

Paris Club members will coordinate closely with non-Paris Club G20 members and other stakeholders to ensure the successful implementation of this Common Framework.

Background notes

1. The Paris Club was formed in 1956. It is an informal group of official creditors whose role is to find coordinated and sustainable solutions to the payment difficulties experienced by borrower countries.

2. The members of the Paris Club are the governments of Australia, Austria, Belgium, Brazil, Canada, Denmark, Finland, France, Germany, Ireland, Israel, Italy, Japan, the Netherlands, Norway, the Republic of Korea, the Russian Federation, Spain, Sweden, Switzerland, the United Kingdom and the United States of America.

Given the significant financing needs that the eligible countries to the Debt Service Suspension Initiative are expected to face in 2021, Paris Club members and the G20 agreed to extend the DSSI by 6 months, and to examine by the time of the 2021 IMF/WBG Spring Meetings if the economic and financial situation requires to extend further the DSSI by another 6 months, with targeted complements to the April 2020 DSSI Term Sheet as set forth in the attached addendum (cf. attachment).

Paris Club members underline that all official bilateral creditors should implement this initiative fully and in a transparent manner. They call on private creditors to participate in the initiative on comparable terms when requested by eligible countries. While protecting their current ratings and low cost of funding, Multilateral Development Banks (MDBs) are encouraged to go further on their collective efforts in supporting the DSSI, including through providing net-positive flows to DSSI-eligible countries during the suspension period, including the extension period.

Furthermore, Paris Club members acknowledge that the COVID-19 health and economic crisis is increasing significantly the debt vulnerabilities of the poorest and most vulnerable countries. In such a context, Paris Club members consider that a multilateral approach, consistent with its principles and coordinated with non-Paris Club creditors, is critical to provide appropriate debt treatment beyond the DSSI on a case-by-case basis. For that purpose, Paris Club creditors agreed on a “Common Framework for Debt Treatments beyond the DSSI”, which is also agreed in principle by the G20. Paris Club members look forward to the endorsement of the Common Framework by G20 members, subject to their domestic approval procedures, ahead of the Riyadh G20 Leaders’ Summit in November 2020, in an extraordinary G20 Finance Ministers and Central Bank Governors meeting where G20 members will publish the Common Framework and also discuss outstanding issues related to the DSSI.

Paris Club creditors and the G20 will continue to closely coordinate its ongoing implementation to provide maximum support to DSSI-beneficiary countries.

Background notes

1. The Paris Club was formed in 1956. It is an informal group of official creditors whose role is to find coordinated and sustainable solutions to the payment difficulties experienced by borrower countries.

2. The 22 members of the Paris Club are: Australia, Austria, Belgium, Brazil, Canada, Denmark, Finland, France, Germany, Ireland, Israel, Italy, Japan, Korea, the Netherlands, Norway, Russian Federation, Spain, Sweden, Switzerland, the United Kingdom and the United States of America.