The Paris Club of sovereign debitors has reached an agreement with the Ivory Coast to restructure its external public debt, prompting an immediate cancellation of $845 million worth, it said on Friday. The deal was concluded under the framework of the enhanced initiative for Heavily Indebted Poor Countries (HIPC), the Paris Club said in a statement (www.clubdeparis.org).
Given the Ivory Coast’s limited capacity to pay, creditors had also agreed to defer repayment of arrears accumulated on post cut-off date debts and maturities falling due during the consolidation period under its post cut-off date debts, it said. This would also apply to moratorium interest due during the consolidation period on the rescheduled and deferred amounts.
The repayment of most of these amounts would begin after April 2012, it said, on condition that the nation continue to satisfactorily implement an International Monetary Fund (IMF) support program. “This agreement is expected to reduce debt service due to Paris Club creditors during the IMF supported programme from $4692 million to $391 million, representing a reduction of 92 percent,” it said.
Several creditors intended to bilaterally grant additional debt relief to the Ivory Coast — the world’s top cocoa grower — beyond the terms of Friday’s agreement, it said, without giving details. The Ivory Coast would seek similar treatment from its private and non-Paris Club bilateral creditors, it said. Austria, Belgium, Canada, France, Germany, Italy, Japan, the Netherlands, Norway, Spain, Switzerland, Brazil, the United Kingdom and the United States took part in the agreement.
SOURCED FROM REUTERS