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Debt treatment -
July 21, 2004

Supporting agreements with the international institutions

Total external debt of the country

$1 950 million as of December 31, 2003

$525 million of which being due to Paris Club as of June 01, 2004

Amounts treated

Categories of debt treated

Treatment of arrears as of May 31, 2004

Treatment of maturities falling due from June 01, 2004 up to December 31, 2006

Repayment profile

Treatment under Houston terms

  • repayment of non ODA credits over 20 years, with 5 years of grace
  • repayment of ODA credits over 20 years with 10 years of grace

repayment profile

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) all ODA loans ; (ii) amounts of outstanding credits and loans on debts mentioned in Article II-1 other than ODA loans, up to 20% of the amounts of outstanding credits as of December 31, 2000 or up to an amount of 5 million SDR, whichever is higher. Participating creditor countries and the Government of Georgia will inform semi-annually the Secretariat of the Paris Club, who will inform other creditors, of the debt swaps agreements they have implemented. All elements necessary to evaluate the operation, its impact on Georgia's economy and on the evolution of creditors' exposure will be transmitted to the Secretariat including: its nature and purpose; the parties to the debt swap; the amount, type and value of the debt treated; the price of sale to investors and the expense of Georgia.


Good will clause

At the request of the representatives of Georgia, Paris Club Creditors agreed in principle to meet in order to examine the situation of Georgia's debt under the Evian Approach at the end of the current Agreement. They will assess the sustainability of Georgia's debt and Georgia's commitment to policies that will secure an exit from the Paris Club and to implementing a comparable treatment from its other external creditors.

Based on that assessment and if Georgia fulfils the criteria here above mentioned and provided that Georgia has established a satisfactory track-record under the present Agreed Minute, made all payments on due date, and concluded a follow-up IMF programme, Paris Club creditors expressed their willingness to consider a debt treatment under the Evian Approach on terms tailored to Georgia's debt situation.



  • First phase : From June 01, 2004 up to December 31, 2004, implemented at the signature of the agreement
  • Second phase : From January 01, 2005 up to December 31, 2005, implemented on August 09, 2005
  • Third phase : From January 01, 2006 up to December 31, 2006, implemented on July 26, 2006

De minimis threshold of 250 000 SDR

Payment of non-consolidated amounts before January 31, 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 Georgia commits to seek promptly from all its external creditors debt reorganisation arrangements on terms comparable to those set forth in the present Agreed Minute, while trying to avoid discrimination among different categories of creditors.

Consequently, the Government of Georgia commits to accord all categories of creditors -and in particular creditor countries not participating in the present Agreed Minute, and private creditors- a treatment not more favourable than that accorded to the Participating Creditor Countries for credits of comparable maturity.

For the purpose of the comparison between the arrangements concluded by the Government of Georgia with its creditors not listed in the present Agreed Minute on the one hand, and with the Participating Creditor Countries on the other hand, all relevant elements will be taken into account, including the real exposure of the creditors not listed in the present Agreed Minute, the level of cash payments received by those creditors from the Government of Georgia as compared to their share in Georgia'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 Government of Georgia and the creditors not listed in the present Agreed Minute.

Cut-off date

November 01, 1999

Organisation of the session

The meeting was chaired by Mr. Ramon Fernandez, Vice-President of the Paris Club.

The head of the debtor country's delegation was Mr. Zurab Nogaideli, Minister of Finance.

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