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Debt treatment -
March 18, 2010

Supporting agreements with the international institutions

Total external debt of the country

$5 600 million as of December 31, 2008

$2 523 million of which being due to Paris Club as of January 01, 2010

Amounts treated

$2 474 million of which $981 million being canceled, of which $1 493 million being rescheduled

Accorded treatment

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.

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