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Debt treatment -
July 19, 2006

Supporting agreements with the international institutions

program with the IMF: 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

$2 362 million of which being due to Paris Club as of April 01, 2006

Amounts treated

$2 388 million of which $1 533 million being canceled, of which $855 million being rescheduled

Accorded treatment

Significant reduction of its external debt following the IMF's approval of an arrangement under the Poverty Reduction and Growth Facility on 26 June 2006

Categories of debt treated

Treatment of arrears as of March 31, 2006

Treatment of maturities falling due from April 01, 2006 up to March 31, 2010

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

Good will clause

Participating Creditor Countries agree to grant a topping-up of the debt reduction of the Agreed Minutes dated 19 July 2006 to Cologne terms if the Government of the Islamic Republic of Afghanistan reaches its Decision Point under the Enhanced HIPC Initiative, provided that the Government of Afghanistan maintains satisfactory relations with the Participating Creditor Countries and the IMF. Participating Creditor Countries agree to grant additional debt relief if the Government of Afghanistan reaches Completion Point under the Enhanced HIPC initiative.


Free transferability provision

The Government of Afghanistan guarantees the immediate and unrestricted transfer of the foreign exchange counterpart of all amounts paid in local currency as of 19 July 2006 as well as all amounts paid from this date by the private debtors in Afghanistan 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 the Central Bank.



  • First phase : From April 01, 2006 up to March 31, 2007, implemented at the signature of the agreement
  • Second phase : From April 01, 2007 up to March 30, 2008, implemented on July 18, 2007
  • Third phase : From April 01, 2008 up to March 31, 2010, implemented on April 07, 2008

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 Afghanistan 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 these 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 Afghanistan commits to accord all categories of creditors -and in particular creditor countries not participating in these 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 Afghanistan with its creditors not listed in these 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 present Agreed Minutes, the level of cash payments received by those creditors from the Government of Afghanistan as compared to their share in the Republic of Afghanistan'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 Afghanistan and the creditors not listed in these Agreed Minutes.

Cut-off date

June 20, 1999

Organisation of the session

The meeting was chaired by Mr. Ambroise Fayolle, Co Chairman of the Paris Club

The head of the debtor country's delegation was Mr. Anwar Ul-Haq Ahady, Minister of Finance


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