Club de Paris

First meeting of the Creditor Committee for Sri Lanka

First meeting of the Creditor Committee for Sri Lanka

Statement

9 May 2023

On May 9^th, 2023, 17 countries have formally formed an official creditor committee, co-chaired by India, Japan and France, to discuss the Sri Lankan authorities’ request for a debt treatment. The committee includes Paris Club creditors as well as other official bilateral creditors. This first meeting occurred after the successful launch of the debt restructuring process for Sri Lanka led by the co-chairs on April 13^th, 2023.

The Sri Lankan authorities attended the meeting and formally presented their request for a debt treatment. They reiterated their commitment to transparency and comparability of treatment towards their official bilateral creditors. The IMF and World Bank representatives presented the latest macroeconomic developments regarding Sri Lanka and the current status of their relationship with the country.

The creditor committee takes note of the open letter addressed by the President of Sri Lanka to all its official bilateral creditors on March 14, 2023 assuring transparency and comparability of treatment for all external creditors and ensuring that no side arrangements inconsistent with comparability of treatment will be made with any creditor. The committee welcomes passage of the resolution for implementation of the IMF-supported programme by the Sri Lankan Parliament on April 28, 2023.

The creditor committee for Sri Lanka will pursue its work to find an appropriate solution to Sri Lanka’s external debt vulnerabilities, consistent with the parameters of the IMF program. It stresses the importance for private creditors and other official bilateral creditors of Sri Lanka to provide a debt treatment on terms at least as favorable as the ones agreed by this creditor committee, in line with the comparability of treatment principle. It reiterates its invitation to other bilateral official creditors to formally join the creditor committee.

Background notes

The members of the creditor committee are representatives of countries with eligible claims on Sri Lanka.
Paris Club members with no eligible claims as well as China, Saudi Arabia and Iran attended the meeting as observers.
Representatives of the International Monetary Fund and the World Bank Group attended the meeting as well.

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First meeting of the Creditor Committee for Sri Lanka

Attachments:

20230509_statement-first_meeting_creditor_committee-sri_lanka.pdf

Event date:

Tuesday, 9 May, 2023 - 18:00

Paris Club Creditors provide financing assurances to support the IMF’s approval of an EFF for Sri Lanka

1. Paris Club members held a meeting on January 25, 2023, in the presence of representatives from Hungary, Saudi Arabia, the Kuwait Fund for Arab Economic Development and India, as well as from the International Monetary Fund and the World Bank, to provide financing assurances to support the approval by the IMF Executive Board of the envisaged IMF program for Sri Lanka, which would allow to restore the country’s macroeconomic stability.

2. They examined the macroeconomic and financial situation of Sri Lanka, including its long-term debt sustainability, and the need for a debt treatment by all bilateral creditors to both fill the financing gap and to ensure Sri Lanka’s debt sustainability in line with the proposed Extended Fund Facility.

3. We acknowledge that the Sri Lankan authorities had the opportunity to present Sri Lanka’s economic and financial situation to their creditors, which underscored the need for debt treatment from all creditors. They also presented their reform program that will be supported by an IMF arrangement requiring a debt treatment to restore debt sustainability, as well as the prior actions already implemented

4. Paris Club members as well as Hungary, Saudi Arabia and India continue to look forward to working together along with all bilateral creditors and to engage with other key stakeholders in order to proceed with a comparable debt restructuring as soon as possible.

5. Shortly after the conclusion of a staff-level agreement between the Sri Lankan authorities and IMF staff on September 1, 2022, on a 48-month Extended Fund Facility arrangement, the Paris Club publicly stated its readiness to provide the necessary financing assurances in a timely manner and in coordination with other bilateral official creditors. To this end, the Paris Club has been engaging proactively with Sri Lankan authorities, the IMF, and Sri Lanka’s other official bilateral creditors, including by sharing its technical analysis in order to enhance the bilateral official creditors’ collective understanding of the need for debt treatment.

6. To support the implementation of the envisaged IMF supported program and the Sri Lankan authorities’ efforts with other official bilateral creditors, Paris Club members, jointly with Hungary, expressed their full commitment to negotiate with Sri Lanka terms of a restructuring of their eligible claims, in accordance with the comparability of treatment principle among all bilateral creditors, and with the goal of restoring debt sustainability with due regard to targets and overall macroeconomic goals under the Extended Fund Facility. Saudi Arabia expressed its support for the process and acknowledged the importance to offer financing assurances in the near future. Members further expressed appreciation for the specific and credible financing assurances issued by India on January 16, 2023 and its coordination with the Paris Club. The Paris Club members as well as Hungary and Saudi Arabia urged other official bilateral creditors, including China, to do the same in line with IMF program parameters as soon as possible.

7. Paris Club members further noted the Sri Lankan authorities’ commitment to seek from all its commercial creditors and other official bilateral creditors a debt treatment on terms at least as favorable, and to hold all creditors in arrears until a comparable debt treatment is provided.

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. A staff-level agreement was concluded between Sri Lankan authorities and the International Monetary Fund staff for a 48-month arrangement under the Extended Fund Facility (EFF) on September 2, 2022.

3. Sri Lanka’s bilateral official creditors which are Paris Club members are Japan, France, Korea, Germany, the United States of American, Spain, the Netherlands, Russia, Sweden, Austria, Canada, the United Kingdom, Denmark, Belgium, and Australia. Non-Paris Club members include China, India, Saudi Arabia, Kuwait, Hungary, Iran, Pakistan, and Bangladesh.

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20230207-statement_sri_lanka.pdf

The Paris Club and Argentina conclude a debt rescheduling

The representatives of Paris Club creditors and of the Government of the Argentine Republic met on 27 and 28 October 2022 and amended the Joint Declaration dated 29 May 2014 to clear the remaining debt in arrears due to Paris Club creditors over a six-year period. This follows the financing assurances provided by the Paris Club creditors on 21 March 2022 to support the approval by the International Monetary Fund of an Arrangement under the Extended Fund Facility (EFF) for the Argentine Republic on 25 March 2022 and is consistent with IMF program parameters with respect to long-term debt sustainability.

The scheme offers a framework for a sustainable solution to the question of arrears due by the Argentine Republic to Paris Club creditors, covering a total estimated stock of arrears of USD 1.972 billion, as of end September 2022. The amendment consists of a rescheduling of 100% of the total amounts of principal and interest due and not paid as of 30 May 2022 inclusive and a reduction of the interest applicable after 30 May 2022.

During the meeting, the delegation of the Argentine Republic described the economic and financial challenges faced by its country and demonstrated the strong determination of Argentine authorities to reduce the economic and financial imbalances and to reach the targets of the program supported by an Arrangement with the IMF under the Extended Fund Facility (EFF).

The Government of the Argentine Republic is committed to obtain the provision by its other official bilateral creditors of new disbursements in line with the assumptions of its financial program. The Government of the Argentine Republic will work regularly with the Paris Club on the progress in such front.

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 participated in the rescheduling were representatives of the Governments of Austria, Belgium, Canada, Denmark, Finland, France, Germany, Israel, Italy, Japan, the Netherlands, Spain, Sweden, Switzerland, the United Kingdom, and the United States of America.

Observers at the meeting were representatives of the Governments of Australia, Brazil, Ireland, Korea, Norway and the Russian Federation, as well as the International Monetary Fund, the World Bank, the European Commission, the Inter-American Development Bank, the Organisation for Economic Cooperation and Development (OECD) and the Secretariat of the UNCTAD.

3. The delegation of the Argentine Republic was headed by Mr. Sergio Massa, Minister of Economy, Mr. Leonardo Madcur, Secretary of State and Chief of Staff, Mr. Marco Lavagna, Secretary of State and in charge of the Secretariat of International Economic and Financial Affairs, and Mr. Nicolas Segal, Undersecretary of External Public Debt Sustainability. The meeting was chaired by Mr. Emmanuel Moulin, Chairman of the Paris Club, Director General of the Treasury at the French Ministry of Economy, Finance and Industrial and Digital Sovereignty.

Technical notes

1. The Argentine Republic’s economic program is supported by an Extended Fund Facility (EFF) approved by the Executive Board of the International Monetary Fund (IMF) on 25 March 2022.

2. The total stock of the Argentine Republic’s debt owed to Paris Club creditors was estimated to be USD 1.972 billion as of 30 September 2022.

3. Repayment, denominated in the original loan currencies, by the Argentine Republic of the corresponding sums are to be made in 13 and successive semi-annual instalments, the first one to be made on December 2022, and the last one to be made on September 2028.

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The Paris Club and Argentina conclude a debt rescheduling

Attachments:

20221028_pr_argentine-vf.pdf

Event date:

Friday, 28 October, 2022 - 19:30

Meeting of the creditor committee for Chad under the Common Framework

Statement

Meeting of the creditor committee for Chad under the Common Framework for debt treatments beyond the DSSI

October 13, 2022

The creditor committee for Chad formed by China, France, India and Saudi Arabia and co-chaired by France and Saudi Arabia (hereinafter “the creditor committee”) met virtually on September 13 and 27, 2022, in presence of the IMF staff and the World Bank staff.

The creditor committee examined the latest developments on the macroeconomic and financial situation of Chad and noted that no debt relief from official bilateral creditors is currently needed given the surge in oil prices since the approval of the IMF upper credit tranche (UCT) program by the Executive Board on December 10, 2021.

In that context, the creditor committee committed to reconvene and address the need for a debt treatment if a financing gap is identified, in accordance with the “Common Framework for Debt Treatment beyond the DSSI”. For that purpose, the creditor committee is finalizing a Memorandum of Understanding (MoU). In addition, the creditor committee reiterated that the Chadian authorities will be expected to seek from all private and other official bilateral creditors debt treatments on terms at least as favorable as those that will be implemented by the creditor committee should a debt treatment be necessary. The creditor committee welcomes the Multilateral Development Banks (MDBs)’s support for Chad’s development and encourages them to maximize their support for Chad to meet its long-term financial needs.

The creditor committee urges the largest private external creditor to reaffirm its commitment to provide a debt treatment during the IMF program should a financing gap be identified, consistent with the approach described above for the creditor committee, on terms at least as favorable as those agreed by creditor committee members. It also urges the largest private external creditor to address the remaining debt vulnerabilities that result from its acceleration repayment mechanism.

Background notes

1. The creditor committee for Chad was formed on April 15, 2021, in application of “Common Framework for Debt Treatments beyond the DSSI” endorsed by the G20 and the Paris Club in November 2020.

2. The members of the creditor committee for Chad are representatives of the governments of China, France, India and Saudi Arabia. France and Saudi Arabia co-chair the creditor committee.

Observers at the meeting were representatives of the International Monetary Fund and the World Bank Group.

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Meeting of the creditor committee for Chad under the Common Framework

Attachments:

statement_creditor_committee_for_chad_131022.pdf

Event date:

Thursday, 13 October, 2022 - 20:15

Paris Club statement on Sri Lanka

Paris Club members welcome the staff-level agreement (SLA) concluded between Sri Lankan authorities and IMF staff for a 48-month arrangement under the Extended Fund Facility (EFF). This agreement represents an important step to restore macroeconomic stability and public debt sustainability.

We note the IMF’s assessment for the need for a debt treatment in the context of the IMF program. The Paris Club is ready to start the debt treatment process and reiterates its willingness to coordinate with non-Paris Club official bilateral creditors to provide the necessary financing assurances in a timely manner and ensure fair burden sharing, as already proposed to the largest other official bilateral creditors.

The Paris Club remains at the disposal of Sri Lankan authorities and non-Paris Club official bilateral creditors to further discuss the next steps of the debt treatment process.

Background notes

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.

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Déclaration du Club de Paris sur le Sri Lanka

Attachments:

20220902-sri_lanka_-_paris_club_statement_september_2022.pdf

Event date:

Friday, 2 September, 2022 - 18:30

Statement of the creditor committee for Ethiopia under the Common Framework

Statement of the creditor committee for Ethiopia under the Common Framework for Debt Treatments beyond the DSSI

July 19, 2022

The creditor committee for Ethiopia co-chaired by China and France (hereinafter “the creditor committee”) met virtually on July 19, 2022, in presence of the IMF staff and the World Bank staff.

The creditor committee discussed the latest macroeconomic developments in the country, welcomed the recent discussions between Ethiopian authorities and IMF staff during the technical visit during June 13-17, and looks forward to the ongoing discussions between the Ethiopian authorities and IMF staff in the context of Ethiopia’s application for an IMF-supported program.

Consistent with members’ national laws and internal procedures, the creditor committee for Ethiopia will pursue its work to find an appropriate solution to external debt vulnerabilities of Ethiopia, in a timely, orderly and coordinated manner, in accordance with the “Common Framework for Debt Treatments beyond the DSSI”.

Background notes

1. The creditor committee for Ethiopia was formed on September 16, 2021, in application of “Common Framework for Debt Treatments beyond the DSSI” endorsed by the G20 and the Paris Club in November 2020.

2. The members of the creditor committee for Ethiopia are representatives of countries with eligible claims on Ethiopia. China and France co-chair the creditor committee.

Observers at the meeting were representatives of the International Monetary Fund and the World Bank Group.

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Statement of the creditor committee for Ethiopia under the Common Framework

Attachments:

statement-creditor_committee_for_ethiopia_under_the_common_framework.pdf

Event date:

Wednesday, 24 August, 2022 - 09:15

2nd Meeting of the Creditor Committee for Zambia under the Common Framework

Second Meeting of the Creditor Committee for Zambia under the Common Framework for Debt Treatments beyond the DSSI

Statement

July 18, 2022

The creditor committee for Zambia formed by countries with eligible claims on Zambia, and co-chaired by China and France (South Africa acting as a vice-chair) (hereinafter “the creditor committee”) met virtually on July 18, 2022, in presence of the IMF staff and the World Bank staff.

The creditor committee examined the macroeconomic and financial situation of Zambia, including its long-term debt sustainability, and its formal request for a debt treatment under the “Common Framework for Debt Treatments beyond the DSSI” endorsed under the Saudi G20 Presidency in November 2020, which was also endorsed by the Paris Club.

The creditor committee supports Zambia’s envisaged IMF upper credit tranche (UCT) program and its swift adoption by the IMF Executive Board to address Zambia’s urgent financing needs. The creditor committee encourages Multilateral Development Banks (MDBs) to maximize their support for Zambia to meet its long-term financial needs.

Consistent with their national laws and internal procedures, creditor committee members are committed to negotiate with the Republic of Zambia terms of a restructuring of their claims to be finalized in a Memorandum of Understanding (MoU), in accordance with the “Common Framework for Debt Treatments beyond the DSSI”.

The creditor committee stresses that the Zambian authorities are expected to seek from all private creditors and other official bilateral creditors debt treatments on terms at least as favorable as those being considered by the creditor committee, in line with the comparability of treatment principle. Consequently, the creditor committee urges private creditors and other official bilateral creditors to commit without delay to negotiate with Zambia such debt treatments that are crucial to ensure the full effectiveness of the debt treatment for Zambia under the Common Framework.

Background notes

1. The creditor committee for Zambia was formed on June 16, 2022, in application of “Common Framework for Debt Treatments beyond the DSSI” endorsed by the G20 and the Paris Club in November 2020.

2. The members of the creditor committee are representatives of countries with eligible claims on Zambia. China and France co-chair the creditor committee while South Africa acts as a vice-chair.

3. Observers at the meeting were representatives of the International Monetary Fund and the World Bank Group.

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statement_-_2nd_creditor_committee_meeting_for_zambia_under_the_cf.pdf

Event date:

Saturday, 30 July, 2022 - 10:30

9th annual Conference of the Paris Forum

Paris Forum calls for sustainable financial practices to address debt vulnerabilities

The Paris Forum organized today its 9^th annual Conference with the support of the Indonesian G20 Presidency and dedicated to promoting sustainable financial practices to address debt vulnerabilities. The Paris Forum brought together G20 creditors, borrowing countries, International Financial Institutions and NGOs to discuss debt issues to tackle the challenges of debt financing for low- income countries. The Paris Forum plays a complementary role to that of the Paris Club: while the Paris Club focuses on negotiations of debt restructuring, the Paris Forum aims to foster open exchanges on sovereign debt issues to improve the international financial architecture.

It also welcomed South Africa as a prospective member of the Paris Club, which will strengthen the work with emerging economies.

This year’s Conference was built on three main themes: a first panel discussion will be dedicated to debt transparency and information sharing; a second one to addressing debt vulnerabilities and a third one to Sovereign Green, Social and Sustainability Bonds. Participants highlighted the rising indebtedness of developing countries and stressed the need for better cooperation among all stakeholders.

The discussions have underscored how greater transparency is crucial. The Paris Club publishes each year the detailed claims of all its members, and the terms of each debt treatment are made public on its website. To move forward in this direction, Paris Club creditors have also decided to increase transparency on its procedures by publishing guidelines for debtor countries on debt treatments (cf. attached).

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.

ParisForum 8 July 2022

The videos of the opening and the closing of the conference are available at the following address (for the original or English version, please click on the player at the bottom right of the video) Retour sur la 9ème conférence du Forum de Paris | Direction générale du Trésor (economie.gouv.fr)

Credit FORUMdePARIS_photoCeliaBonnin

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Attachments:

guidelines_for_a_paris_club_process_vf.pdf

2022_conference_of_the_paris_forum_agenda-vfinal.pdf

panel_1_issues_note_transparency_and_information_sharing.pdf

panel_2_issues_note_adressing_debt_vulnerabilities.pdf

panel_3_issues_note_sovereign_gss_bonds.pdf

list_of_participants-parisforum_08_07_2022-final.pdf

Event date:

Friday, 8 July, 2022 - 18:45

South Africa becomes a prospective member of the Paris Club

The Paris Club welcomes South Africa’s decision to upgrade its participation in the Paris Club from ad hoc participant to prospective member. This status provides countries an enhanced engagement in the work of the Paris Club, with the opportunity to join the Paris Club as a full member in the near term.

It demonstrates both South Africa’s interest to work more closely on sovereign debt issues with Paris Club members as well as the attractiveness of the Paris Club principles for emerging creditors.

South Africa has been playing a growing role as a sovereign creditor over recent years and its decision to join the Club as a prospective member is the continuation of a long story of cooperation with the Paris Club. Since 1982, South Africa has participated in 13 Paris Club negotiations as a creditor; these treatments have benefited 6 debtor countries. South Africa has also participated in the G20 and Paris Club Debt Service Suspension Initiative (DSSI). The Paris Club has highly appreciated the attendance of South Africa at Paris Club meetings on an ad hoc basis since 2015. This has contributed to the establishment of an excellent relationship on sovereign debt issues.

South Africa and the Paris Club share common interest in promoting coordinated solutions to help borrowing countries. The deepening of the relationship between South African and the Paris Club consolidates the role of the Paris Club as the main international forum for sovereign debt restructuring.

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.

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South Africa becomes a prospective member of the Paris Club

Attachments:

20220708_pr_south_africa_prospective_member.pdf

Event date:

Friday, 8 July, 2022 - 16:30

1st meeting of the Creditor Committee for Zambia under the Common Framework

First meeting of the Creditor Committee for Zambia under the Common Framework for Debt Treatments beyond the DSSI

Statement

June 16, 2022

On June 16, 2022, 16 countries have formally formed a creditor committee under the Common Framework, co-chaired by China and France and vice-chaired by South Africa, to discuss the Zambian authorities’ request of a debt treatment under “the Common Framework for Debt Treatment beyond the DSSI” endorsed by the G20 and the Paris Club.

The Zambian authorities attended the meeting and formally presented their request for a debt treatment. The IMF and World Bank representatives presented the latest macroeconomic developments regarding Zambia and the current status of their relationship with Zambia.

Consistent with members’ national laws and internal procedures, the creditor committee for Zambia will pursue its work to find an appropriate solution to external debt vulnerabilities of Zambia, in a coordinated manner.

As outlined in the Common Framework, the creditor committee stressed the importance for private creditors and other official bilateral creditors of Zambia to provide debt treatments under the Common Framework on terms at least as favorable, in line with the comparability of treatment principle.

Background notes

1. The creditor committee for Zambia was formed on June 16, 2022, in application of the “Common Framework for Debt Treatments beyond the DSSI” endorsed by the G20 and the Paris Club in November 2020.

2. The members of the creditor committee are representatives of countries with eligible claims on Zambia. China and France co-chair the creditor committee while South Africa acts as a vice-chair.

3. Observers at the meeting were representatives of the International Monetary Fund and the World Bank Group.

4. The delegation of Zambia was headed by Hon. Dr Situmbeko Musokotwane, Minister of Finance and National Planning.

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1st meeting of the Creditor Committee for Zambia under the Common Framework

Attachments:

20220624_statement_-_first_creditor_committee_meeting_zambia_16_june_2022.pdf

Event date:

Friday, 24 June, 2022 - 18:15

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