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Debt treatment -
January 24, 1997

Supporting agreements with the international institutions

IMF program under the ESAF approved on October 11, 1996


Amounts treated

$183 million

Categories of debt treated

Treatment of arrears as of December 31, 1996

Treatment of maturities falling due from January 01, 1997 up to October 31, 1999

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 [treated in the present Agreed Minute] as regards official development aid loans ; (ii) the amounts of other outstanding credits, loans and consolidations [treated in the present Agreed Minute], up to 20% of the amounts of outstanding credits as of November 30, 1992 or up to an amount of 20 million SDR, whichever is higher.


Good will clause

In response to the request of the representatives of the Government of Ethiopia, the Participating Creditor Countries agreed in principle to a meeting to consider the matter of Ethiopia's debt service payments falling due after October 31, 1999 and relating to loans or credits pursuant to a contract or other financial arrangement concluded before December 31, 1989 provided :

- that Ethiopia continues to have an appropriate arrangement with the International Monetary Fund ;

- that Ethiopia has reached with other creditors effective arrangements meeting the conditions described in [the recommendations] and has reported in writing to the Chairman of the Paris Club, pursuant to [the recommendations] ;

- and that Ethiopia has complied with all conditions set out in this Agreed Minute.


Free transferability provision

The Government of Ethiopia guarantees the immediate and unrestricted transfer of the foreign exchange counterpart of all amounts paid in local currency by the private debtors in Ethiopia for servicing their foreign debt legally contracted under the Ethiopian law and owed to or guaranteed by the Participating or Observer Creditor Countries or their appropriate institutions.


Pullback clause

The Participating Creditor Countries reserve the right to review and agree to the implementation of the conditions stated in [the present Agreed Minute] for the comparability of treatment between all creditor countries. If the Participating Creditor Countries determine that these conditions are not substantially fulfilled, and do not agree to their implementation, the provisions [...] of the present Agreed Minute will become null and void. In this case, the total amount of debts covered by the present Agreed Minute will be due and payable at that time, with the exception of maturities which have not yet fallen due on these debts. Any payments of principal and interest already made under [the present Agreed Minute] will be taken into account.



  • First phase : From January 01, 1997 up to December 31, 1997, implemented at the signature of the agreement
  • Second phase : From January 01, 1998 up to December 31, 1998, implemented on November 20, 1998
  • Third phase : From January 01, 1999 up to October 31, 1999, not implemented

De minimis threshold of 250 000 SDR

Payment of non-consolidated amounts before March 31, 1997

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 Ethiopia commits itself to negotiate debt reorganization arrangements with all its external creditors.

The Government of Ethiopia commits itself not to accord any category of creditors -and in particular creditor countries not participating in the present Agreed Minute, commercial banks and suppliers- a treatment more favourable than that accorded by the Participating Creditor Countries for credits of comparable maturity and legal nature.

Organisation of the session

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