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Debt treatment -
July 15, 2021

Supporting agreements with the international institutions

IMF programme supported by the arrangement under the Extended Credit Facility (ECF) approved on 29 June 2021

EFF document (not yet available on IMF website)

Decision Point Document for the Enhanced Heavily Indebted Poor Countries

Total external debt of the country

$23 506 million of which being due to Paris Club as of 31 December 2020

Amounts treated

$22 073 million of which $14 060 million being cancelled, of which $8 007 million being rescheduled

Accorded treatment

Debt relief of its external public debt, this country having reached its Decision Point under the enhanced initiative for the Heavily Indebted Poor Countries (enhanced HIPC Initiative) in June 2021

Categories of debt treated

Treatment of arrears as of 31 December 2020

Treatment of maturities falling due from 1 January 2021 up to 30 September 2024

Repayment profile

Treatment under Naples terms and Cologne terms

  • 67% cancellation of pre cut-off-date non Official Development Assistance (NODA) claims and rescheduling of the remaining claims over 23 years, with a 6 years  grace period
  • 100% rescheduling of pre cut-off-date ODA claims treated over 40 years with a 16 years grace period

On an exceptional basis, the Paris Club creditors have also decided to defer over 16 years period from 1 December 2024 the repayment of arrears accumulated by Sudan on short term and post cut-off date debts, the maturities falling due during the consolidation period under the post cut-off date debts as well as all moratorium interest due during the consolidation period on the rescheduled and deferred amounts.

Representatives from Kuwait Fund for Arab Economic Development, Saudi Fund for Development, the Abu Dhabi Fund for Development and the Czech Republic also attended the meeting as observers. They expressed their support to the terms reached between the Paris Club and the Government of Sudan and indicated their willingness to provide to Sudan comparable terms under the framework of enhanced HIPC Initiative and in accordance with terms and conditions adopted by their respective Boards of Directors.

Specific provisions

Good will clause

Given the decision by Participating Creditor Countries to contribute to the exceptional assistance in favour of the Government of the Republic of the Sudan under the Enhanced HIPC Initiative, the Participating Creditor Countries declare their readiness to hold a meeting at Completion Point designed to examine the question of the Republic of the Sudanof Somalia’s outstanding debt stock and to make the necessary effort in favour of the Republic of the Sudan to allow it to reach the objective of its debt sustainability in the context of an equitable burden sharing among creditors, provided that:

- the Government of the Republic of the SudanSomalia maintains satisfactory relations with the Participating Creditor Countries and a sound reform track record;

- the Executive Boards of the IMF and the IDA decide that the Republic of the SudanRepublic of Somalia has reached its Completion Point under the enhanced HIPC initiative.

Furthermore, if as of 30 June 2024, the Republic of the Sudan has not reached its Completion Point under the enhanced HIPC initiative, the Participating Creditor Countries declare their readiness in principle to a meeting to consider the matter of the Republic of the Sudan's debt service payments falling due after 30 September 2024, provided:

- that the Republic of the Sudan continues to have an appropriate arrangement with the IMF;

- that the Republic of the Sudan has made all reasonable efforts to reach with other creditors effective arrangements meeting the conditions and has reported in writing to the Chairperson of the Paris Club;

- and that the Republic of the Sudan has complied with all conditions set out in the Agreed Minutes dated 15 July 2021.

Phases

  • First phase : From 1 January 2021 up to 30 September 2022, effective upon signature of the agreed minutes by all relevant parties
  • Second phase : From 1 October 2022 up to 30 September 2023
  • Third phase : From 1 October 2023 up to 30 September 2024

Comparability of treatment provision

The Republic of the Sudan was declared eligible to the Enhanced HIPC initiative by the IDA and the IMF in March 2021 and was declared to have reached its Decision Point in June 2021. In this context, the Republic of the Sudan commits to finalize the debt data reconciliation process and seek promptly from all its external creditors which are not participating in the Agreed Minutes dated 15 July 2021, 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 the Sudan’s external debt, the nature and characteristics of all treatments 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 the Sudan and creditor countries not listed in the Agreed Minutes dated 15 July 2021.

Consequently, the Government of the Republic of the Sudan commits not to accord any category of creditors a treatment more favourable than that accorded to the Participating Creditor Countries.

Cut-off date

1 January 1984

Organisation of the session

The meeting was chaired by Mr. Emmanuel MOULIN, Chairman of the Paris Club.

The head of the debtor country's delegation was Dr. Gibril IBRAHIM, Minister of Finance and Economic Planning.

Observers
  • BRAZIL, CZECH REPUBLIC, FINLAND, KOREA, REPUBLIC OF, KUWAIT, SAUDI ARABIA, UNITED ARAB EMIRATES

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