CONGO Debt treatment - December 16, 2004
Supporting agreements with the international institutions
Poverty Reduction and Growth Facility under the PRGF approved on December 6, 2004
Total external debt of the country
$8,570 million as of December 31, 2003
$4,694 million of which being due to Paris Club as of September 30, 2004
Amounts treated
$3,016 million of which $1,680 million being cancelled, of which $1,336 million being rescheduled
Accorded treatment
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 1, 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 December 16, 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 1, 2004 up to September 30, 2005, implemented at the signature of the agreement
- Second phase : From October 1, 2005 up to September 30, 2006, implemented on August 1, 2006
- Third phase : From October 1, 2006 up to September 30, 2007, not implemented
Payment of non-consolidated amounts before June 1, 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 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, 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 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, 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.
Cut-off date
January 1, 1986
Organisation of the session
The meeting was chaired by Mrs. Odile RENAUD-BASSO, Co-Chairperson of the Paris Club.
The head of the debtor country's delegation was Mr. Rigobert Roger ANDELY, Minister of Economy, Finance and Budget.
- BELGIUM
- BRAZIL
- CANADA
- DENMARK
- FRANCE
- GERMANY
- ITALY
- RUSSIAN FEDERATION
- SPAIN
- SWITZERLAND
- UNITED KINGDOM
- UNITED STATES OF AMERICA
- JAPAN
- African Development Bank
- IMF
- UNCTAD
- World Bank