Debt cancellation following the Togolese Republic having reached its Completion Point under the enhanced initiative for the Heavily Indebted Poor Countries (enhanced HIPC Initiative) on 14 December 2010
Categories of debt treated:
Treatment of arrears as of November 30, 2010
Treatment of the stock as of December 01, 2010
Repayment profile:
Treatment under HIPC Initiative Exit terms
Paris Club creditors also expressed their intention to grant additional debt relief on a bilateral basis for an amount of USD 404 million.
As a result of this agreement and additional bilateral efforts, the Togolese Republic's debt to Paris Club creditors will be reduced by 95%.
Specific provisions:
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) the amounts of outstanding loans and consolidations as regards ODA debts;
(ii) the amounts of other outstanding credits, loans and consolidations, up to 10% of the amounts of outstanding loans, credits and consolidations as of 30 June 1992 or up to an amount of 20 million of dollars of the United States of America, whichever is higher.
Comparability of treatment provision:
The Togolese Republic was declared eligible to the enhanced HIPC Initiative by the IDA and the IMF in 2008 and was declared to have reached its Completion Point in December 2010. In this context, the Togolese Republic commits to seek promptly from all its external creditors which are not participating in the Agreed Minutes dated 16 December 2010, their appropriate contribution in terms of debt relief to the enhanced HIPC Initiative, on top of traditional debt relief mechanisms and consistent with the proportional burden sharing based on their relative exposure in net present value of total external debt at Decision Point after the full use of traditional debt relief mechanisms.
The appropriate nature of the debt relief provided will be assessed not only on the basis of the reduction in the net present value of the debt as computed under Appropriate Market Rate, but also on the terms of repayment of the debts not cancelled. For this purpose, all relevant elements will be taken into account, including the level of cash payments received by those creditors as compared to their share in the Togolese Republic's external debt, the nature and characteristics of all treatment applied, including debt buy backs, and all characteristics of the reorganized claims and in particular their repayment terms whatever forms they take and in general the financial relations between the Togolese Republic and all their other creditors.
Consequently, the Togolese Republic commits not to accord any category of external creditors -and in particular litigating creditors, creditor countries not participating in the Agreed Minutes dated 16 December 2010, commercial banks, suppliers and bondholders- a treatment more favourable than that accorded to the Participating Creditor Countries.
Cut-off date:
January 01, 1983
Organisation of the session:
The meeting was chaired by Mr. Rémy RIOUX, Vice Chairman of the Paris Club
The head of the debtor country's delegation was Mr. Adji Otèth AYASSOR, Minister of Economy and Finance
Debt relief of the external public debt, following the approval by the International Monetary Fund (IMF) of a new three year arrangement under the Poverty Reduction and Growth Facility on 21 April 2008
Categories of debt treated:
Treatment of arrears as of March 31, 2008
Treatment of maturities falling due from April 01, 2008 up to March 31, 2011
Repayment profile:
Treatment under Naples terms (cancellation rate of 67%)
repayment of non ODA credits over 23 years, with 6 years of grace, after cancellation to a rate of 67%
repayment of ODA credits over 40 years with 16 years of grace
Specific provisions:
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) the amounts of outstanding loans and consolidations as regards ODA debts, with the exception of those administered by IDA and provided by the European Union member States;
(ii) the amounts of other outstanding credits, loans and consolidations with the exception of those administered by IDA and provided by the European Union member States, up to 10% of the amounts of outstanding loans, credits and consolidations as of 30 June 1992 or up to an amount of 20 million of dollars of the United States of America, whichever is higher.
Good will clause
Participating Creditor Countries agree to grant a topping-up of the debt reduction to Cologne terms once the Togolese Republic reaches its Decision Point under the Enhanced Debt Initiative for the Heavily Indebted Poor Countries, provided that the Government of the Togolese Republic maintains satisfactory relations with the Participating Creditor Countries and the IMF.
Phases
First phase : From April 01, 2008 up to March 31, 2009, implemented at the signature of the agreement
Second phase : From April 01, 2009 up to March 31, 2010, implemented on July 17, 2009
Third phase : From April 01, 2010 up to March 31, 2011, implemented on July 23, 2010
De minimis threshold of 10 000 USD
Comparability of treatment provision:
In order to secure comparable treatment of its debt due to all its external public or private creditors, the Government of the Togolese Republic commits to seek from all its external creditors debt reduction and reorganisation arrangements on terms comparable in net present value to those set forth in the Agreed Minutes dated 12 June 2008 for credits of comparable maturity. Comparability of treatment for debt reduction in net present value is assessed not only on the basis of the reduction in the face value of the debt but also on the terms of repayment of the debts not cancelled.
Consequently, the Government of the Togolese Republic commits to accord all categories of creditors -and in particular creditor countries not participating in the Agreed Minutes dated 12 June 2008, commercial banks and suppliers - a treatment not more favourable than that accorded to the Participating Creditor Countries.
For the purpose of the comparison between the arrangements concluded by the Government of the Togolese Republic with its creditors not listed in the Agreed Minutes dated 12 June 2008 on the one hand, and arrangements with the Participating Creditor Countries on the other hand, all relevant elements will be taken into account, including the exposure of the creditors not listed in the Agreed Minutes dated 12 June 2008, the level of cash payments received by those creditors from the Government of the Togolese Republic as compared to their share in the Togolese Republic's external debt, the nature and characteristics of all treatment applied, including debt buy backs, and all characteristics of the reorganised claims and in particular their repayment terms whatever forms they take, and in general the financial relations between the Government of the Togolese Republic and the creditors not listed in the Agreed Minutes dated 12 June 2008.
Cut-off date:
January 01, 1983
Organisation of the session:
The meeting was chaired by Mr. Julien RENCKI, Vice Chairman of the Club de Paris.
The head of the debtor country's delegation was Mr. Adji Otèth AYASSOR, Minister of Economy and Finance.
