Reduction of the debt following the Republic of Congo having reached its Completion Point under the enhanced initiative for the Heavily Indebted Poor Countries (enhanced HIPC Initiative) on 27 January 2010
Categories of debt treated:
Treatment of the stock as of January 01, 2010
Repayment profile:
Treatment under HIPC Initiative Exit terms
Creditors members of the Paris Club also expressed their intention to grant additional debt relief to 100% on a bilateral basis for an amount of USD 1.4 billion
As a result, the total debt relief will amount to USD 2.4 billion
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 20% of the amounts of outstanding loans, credits and consolidations as of 31 August 1990 or up to an amount of 20 million SDR, whichever is higher.
Comparability of treatment provision:
The Republic of Congo was declared eligible to the enhanced HIPC Initiative by the IDA and the IMF in 2004 and was declared to have reached its Completion Point in January 2010. In this context, the Republic of Congo commits to seek promptly from all its external creditors which are not participating in the Agreed Minutes dated 18 March 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 Republic of 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 Republic of Congo and all their other creditors.
Consequently, the Republic of Congo commits not to accord any category of external creditors -and in particular litigating creditors, creditor countries not participating in the Agreed Minutes dated 18 March 2010, commercial banks, suppliers and bondholders- a treatment more favourable than that accorded to the Participating Creditor Countries.
Cut-off date:
January 01, 1986
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. Gilbert ONDONGO, Minister of Finance, Budget and Public Portfolio.
Restructuring of the public external debt, following the approval of an arrangement under the Poverty Reduction and Growth Facility by the International Monetary Fund on December 6, 2004. This agreement is the result of the economic and financial recovery effort made by the Republic of Congo in the course of the last two years.
Categories of debt treated:
Treatment of maturities falling due from October 01, 2004 up to September 30, 2007
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; (ii) the amounts of other outstanding credits, loans and consolidations, up to 20% of the amounts of outstanding loans, credits and consolidations as of August 31, 1990 or up to an amount of 20 million SDR, whichever is higher.
Good will clause
Participating Creditor Countries agree to grant a topping-up of the debt reduction of the Agreed Minutes dated 16 December 2004 to Cologne terms once the Government of the Republic of Congo reaches its Decision Point under the Enhanced Debt Initiative for the Heavily Indebted Poor Countries, provided that the Government of the Republic of Congo maintains satisfactory relations with the Participating Creditor Countries and the IMF.
Free transferability provision
The Government of the Republic of Congo guarantees the immediate and unrestricted transfer of the foreign exchange counterpart of all amounts paid in local currency as of December 16, 2004 by the private debtors in the Republic of Congo for servicing their foreign debt owed to or guaranteed by the Participating Creditor Countries or their appropriate institutions, for which the corresponding payments in local currency have been or will be deposited in Banque des Etats d'Afrique Centrale.
Phases
First phase : From October 01, 2004 up to September 30, 2005, implemented at the signature of the agreement
Second phase : From October 01, 2005 up to September 30, 2006, implemented on August 01, 2006
Third phase : From October 01, 2006 up to September 30, 2007, not implemented
Payment of non-consolidated amounts before June 01, 2005
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 Congo 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 16 December 2004 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 Republic of Congo commits to accord all categories of creditors -and in particular creditor countries not participating in the Agreed Minutes dated 16 December 2004, commercial banks and suppliers- a treatment not more favorable than that accorded to the Participating Creditor Countries.
For the purpose of the comparison between the arrangements concluded by the Government of the Republic of Congo with its creditors not listed in the Agreed Minutes dated 16 December 2004 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 16 December 2004, the level of cash payments received by those creditors from the Government of the Republic of Congo as compared to their share in the Republic of Congo'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 Republic of Congo and the creditors not listed in the Agreed Minutes dated 16 December 2004.
Cut-off date:
January 01, 1986
Organisation of the session:
The meeting was chaired by Madame Odile RENAUD-BASSO, Co Chairman of the Paris Club.
The head of the debtor country's delegation was Mr. Rigobert Roger ANDELY, Minister of Economy, Finance and Budget.
