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Debt treatment -
March 17, 2010

Supporting agreements with the international institutions

IMF programme supported by an Arrangement under the Poverty Reduction and Growth Facility (PRGF) approved on June 26, 2006
Download the IMF report : PRGF document

Total external debt of the country

$2 104 million as of March 20, 2009

$1 027 million of which being due to Paris Club as of January 01, 2010

Amounts treated

$1 027 million of which $442 million being canceled, of which $585 million being rescheduled

Accorded treatment

Debt cancellation following Afghanistan’s having reached its Completion Point under the enhanced initiative for the Heavily Indebted Poor Countries (enhanced HIPC Initiative) on 26 January 2010

Categories of debt treated

Treatment of the stock as of January 01, 2010

Repayment profile

Treatment under HIPC Initiative Exit terms

Paris Club creditors also committed on a bilateral and voluntary basis to provide an additional effort of USD 585 million, delivering 100% debt relief. The Islamic Republic of Afghanistan committed to allocate the resources freed by the present debt relief to priority areas identified in the Afghanistan National Development Strategy and to achieve the Millennium Development Goals.

Comparability of treatment provision

The Islamic Republic of Afghanistan was declared eligible to the enhanced HIPC Initiative by the IDA and the IMF in 2007 and was declared to have reached its Completion Point in January 2010. In this context, the Islamic Republic of Afghanistan commits to seek promptly from all its external creditors which are not participating in the Agreed Minutes dated 17 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 Islamic Republic of Afghanistan '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 Islamic Republic of Afghanistan and creditor countries not listed in the Agreed Minutes dated 17 March 2010.

Consequently, the Islamic Republic of Afghanistan commits not to accord any category of external creditors -and in particular creditor countries not participating in the Agreed Minutes dated 17 March 2010, commercial banks, suppliers and bondholders- a treatment more favourable than that accorded to the Participating Creditor Countries.

Cut-off date

June 20, 1999

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 Dr. Omar ZAKHILVAL, Minister of Finance


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