Reduction of the debt following the DRC having reached its Completion Point under the enhanced initiative for the Heavily Indebted Poor Countries (enhanced HIPC Initiative) on 1 July 2010
Categories of debt treated:
Treatment of arrears as of June 30, 2010
Treatment of the stock as of July 01, 2010
Repayment profile:
Treatment under HIPC Initiative Exit terms
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) all ODA loans with the exception of loans;
(ii) the amounts of other outstanding credits, loans and consolidations with the exception of loans, up to 20% of the amounts of outstanding credits as of 30 June 2009 or up to an amount of 20 million dollars of the United States of America, whichever is higher.
Comparability of treatment provision:
The Democratic Republic of the Congo was declared eligible to the enhanced HIPC Initiative by the IDA and the IMF in 2003 and was declared to have reached its Completion Point in July 2010. In this context, the Democratic Republic of the Congo commits to seek promptly from all its external creditors which are not participating in the Agreed Minutes dated 17 November 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 Democratic Republic of the Congo'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 Democratic Republic of the Congo and creditor countries not listed in the Agreed Minutes dated 17 November 2010.
Consequently, the Democratic Republic of the Congo commits not to accord any category of external creditors -and in particular creditor countries not participating in the Agreed Minutes dated 17 November 2010, commercial banks, suppliers and bondholders and litigating creditors- a treatment more favourable than that accorded to the Participating Creditor Countries.
Cut-off date:
June 30, 1983
Organisation of the session:
The meeting was chaired by Ms. Delphine d'AMARZIT, Co Chairperson of the Paris Club.
The head of the debtor country's delegation was Mr. MATATA PONYO Mapon, Minister of Finance.
On a voluntary basis, the Government of each Participating Creditor Country or its appropriate institutions may sell or exchange, in the framework of debt swaps, the amounts of outstanding credits, loans and consolidations [treated in the present Agreed Minute], up to 10 % of the Relevant Principal, or up to an amount of 20 million US dollars, whichever is higher.
Pullback clause
a) The Participating Creditor Countries reserve the right to review the implementation of the conditions stated [...] for the comparability of treatment between all external creditors ; if the Participating Creditor Countries determine that these conditions are not substantially fulfilled, or if the Government of the Republic of Poland has not met its payments obligations to the Participating Creditor Countries during the first three years, the provisions [...] of the present Agreed Minute will become null and void.
Special account
To facilitate the implementation of this Agreed Minute, the Narodowy Bank Polski will deposit in a special account to be established with the Bank of International Settlements the equivalent of at least 1 800 Million Dollars of the United States of America in 12 quarterly instalments of at least 150 Million Dollars of the United States of America, the first one to be made on July 1, 1991. The Narodowy Bank Polski will arrange to have the Bank of International Settlements notify the Chairman of the Paris Club as soon as each deposit has been made. The total amount approximates the amount estimated to be payable to all Participating Creditor Countries during the next three years. As specific payments under this Agreed Minute become due, the Narodowy Bank Polski will draw on the special account to meet these payments ; no drawing will be made on the special account for any other repayment before all payments due through March 31, 1994 inclusive under this Agreed Minute have been made. Any drawing on this account will be made after a previous 15-day notice to the Bank of International Settlements, which this Bank will notify immediately to the Chairman of the Paris Club.
Payment of non-consolidated amounts before July 31, 1991
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 Republic of Poland commits itself to seek from all its external creditors debt reduction and reorganization arrangements on terms comparable to those set forth in this Agreed Minute for credits of comparable maturity.
This means that the Government of the Republic of Poland commits itself to accord all categories of creditors - and in particular creditor countries not participating in this Agreed Minute, commercial banks and suppliers - a treatment not more favourable than that accorded the Participating Creditor Countries.
The Government of the Republic of Poland will inform regularly in writing the Chairman of the Paris Club of the progress made for this purpose in the negotiations with all its external creditors. A first report should be provided to the Chairman of the Paris Club by June 1, 1991.
The Government of the Republic of Poland will inform without delay the Chairman of the Paris Club of the content of any agreement reached with its other external creditors.
(a) In particular, the Government of the Republic of Poland commits itself to seek from its creditor banks a debt reduction and reorganization agreement in terms comparable to the provisions set forth in the present Agreed Minute.
(b) For the purpose of the comparison between the arrangements concluded by the Government of the Republic of Poland with its creditor banks on the one hand, and with the Participating Creditor Countries on the other hand, all relevant elements will be taken into account, including the real exposure of the banks, the level of cash payments received by the banks from the Government of the Republic of Poland as compared to their share in the Republic of Poland's external debt, the nature and characteristics of all options offered, including debt buy backs, and all characteristics of the reorganized claims. The latter will include the enhancements, if any, granted to the banks such as those supported by international financial institutions and value recovery provisions, if any.
The Government of the Republic of Poland will inform in writing the Chairman of the Paris Club, on a yearly basis, of the cash payments made by the Republic of Poland to its external creditors, and especially to the commercial banks.
The Government of the Republic of Poland will seek to secure from each of its creditor countries not participating in this Agreed Minute a debt reduction and reorganization agreement in terms comparable to those set forth in this Agreed Minute. The Government of the Republic of Poland agrees not to accord any such creditor country repayment terms more favourable than those accorded to the Participating Creditor Countries.
The Government of the Republic of Poland agrees that it will promptly negotiate debt reduction and reorganization agreements with all other creditors on debts of a comparable term.
