Supporting agreements with the international institutions
IMF program supported by an Arrangement under the Poverty Reduction and Growth Facility (PRGF) approved on March 01, 2001
Download the IMF report : Madagascar letter of intent
Total external debt of the country
$4 358 million as of December 31, 1999
$1 602 million of which being due to Paris Club as of December 31, 2000
Amounts treated
$254 million of which $161 million being canceled, of which $93 million being rescheduled
Accorded treatment
Decision point reached on December 21, 2000
Categories of debt treated
Treatment of arrears as of December 01, 2000
Treatment of maturities falling due from December 01, 2000 up to November 30, 2004
Repayment profile
Treatment under Cologne terms (cancellation rate of 90%)
- repayment of non ODA credits over 23 years, with 6 years of grace, after cancellation to a rate of 90%
- 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 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) the amounts of other outstanding credits, loans and consolidations mentioned in paragraph 1. above, up to 20% of the amounts of outstanding credits as of December 31, 1994 or up to an amount of SDR 20 million, whichever is higher. Participating creditor countries and the Government of the Republic of Madagascar 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 the Republic of Madagascar's economy and on the evolution of creditor's 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 the Republic of Madagascar.
Good will clause
Given the decision by Paris Club Creditors to contribute to the exceptional assistance in favour of the Republic of Madagascar under the enhanced Debt Initiative for the Heavily Indebted Poor Countries, the Participating Creditor Countries declare their readiness in principle to hold a meeting at the completion point designed to examine the question of the Republic of Madagascar's outstanding debt stock and to make the necessary effort, in favour of the Republic of Madagascar to reach the objective of its debt sustainability in the context of an equitable burden sharing among creditors, provided that :
- the Republic of Madagascar maintains satisfactory relations with participating Creditor Countries, fully implements all the agreements signed with them and maintains a sound adjustment track record ;
- the Boards of the International Monetary Fund and the International Development Association decide that the Republic of Madagascar has reached its completion point under the enhanced Debt Initiative for the Heavily Indebted Poor Countries.
Phases
- First phase : From December 01, 2000 up to December 31, 2001, implemented at the signature of the agreement
- Second phase : From January 01, 2002 up to December 31, 2002, implemented on January 20, 2003
- Third phase : From January 01, 2003 up to November 30, 2004, implemented on July 10, 2003
Payment of non-consolidated amounts before June 30, 2001
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 the Republic of Madagascar commits itself to seek from all its external creditors debt reduction and reorganisation arrangements on terms comparable in net present value to those set forth in the present Agreed Minute 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 the Republic of Madagascar commits itself to accord all categories of creditors -and in particular creditor countries not participating in the present Agreed Minute, 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 the Republic of Madagascar with its creditors not listed in the present Agreed Minute 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 Minute, the level of cash payments received by those creditors from the Government of the Republic of Madagascar as compared to their share in the Madagascar'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 the Republic of Madagascar and the creditors not listed in the present Agreed Minute.
Cut-off date
July 01, 1983
Organisation of the session
The meeting was chaired by M. Bruno Bézard, Vice President of the Paris Club.
The head of the debtor country's delegation was M. Tantely Andrianarivo, Prime Minister, Minister of Finances.