Guyana to save US$590M in debt service
Guyana will save about US$590 million over the life of outstanding loans following an international announcement on Friday that it had qualified for additional debt service. However, while interim relief is being granted immediately, three key requirements must be satisfied for Guyana to receive the full amount of assistance. The relief comes under the enhanced Heavily Indebted Poor Countries (HIPC) Initiative, which the International Monetary Fund (IMF) and the World Bank Group's International Development Association (IDA) have agreed to support as a comprehensive debt reduction package for Guyana, a joint release from the two institutions said late on Friday. Both said they would deliver full assistance under the programme "once important actions have been taken to help achieve the government's objectives of sustainable growth and reducing poverty within a stable macroeconomic environment." These "actions" focus on: - Completion of a participatory poverty reduction strategy paper, and its broad endorsement by the boards of the IMF and the World Bank; - Implementation of an agreed set of social and public sector reforms, and maintenance of financial stability; - Confirmation of the participation of other creditors in the debt relief operation. The US$590 million in debt service over "the coming years" is equal to US$329 million in net present value (NPV) terms, and is in addition to relief committed under the original HIPC Initiative, worth US$440 million in debt service relief, or US$256 million in NPV terms. The combined relief from the original and enhanced HIPC Initiative will reduce Guyana's outstanding debt in NPV terms by 54 per cent. According to the release, the IMF, the World Bank, and most other multilateral creditors, as well as the Paris Club of bilateral creditors have delivered their full share of assistance under the original HIPC Initiative. The IMF and the World Bank will start providing the additional debt relief under the enhanced HIPC Initiative effective immediately as interim relief. IDA's assistance under the enhanced Initiative amounts to US$71 million (US$40.7 million in NPV terms). IMF's assistance under the enhanced HIPC Initiative amounts to US$46 million (US$39.5 million in NPV terms), combined with the assistance provided under the original HIPC Initiative, the IMF's HIPC assistance will amount to a total of US$95 million. Combined with about US$60 million of assistance under the original initiative, IDA is delivering to Guyana over US$130 million in debt service relief. The Inter-American Development Bank, Guyana's largest multilateral creditor, has already delivered US$105 million in relief (US$52 million in NPV terms) under the original HIPC Initiative and has agreed on a framework that will enable it to meet its obligation of US$64 million in NPV terms under the enhanced HIPC Initiative in the near future. Thirty-six countries are expected to qualify for assistance under the enhanced HIPC Initiative, of which 29 are sub-Saharan African countries and four are in Latin America. Apart from Guyana, 11 other countries have reached their decision points under the enhanced framework--Benin, Bolivia, Burkina Faso, Cameroon, Guyana, Honduras, Mali, Mauritania, Mozambique, Senegal, Tanzania and Uganda. Total committed assistance to these countries is estimated at over US$19 billion, representing an average stock-of-debt reduction of about 50 per cent on top of traditional debt relief mechanisms.
 Follow the goings-on in Guyana
|