Debt Relief Trust Fund (DRTF)
The Debt Relief Trust Fund (DRTF), formerly known as the Heavily Indebted Poor Countries (HIPC) Initiative, was launched in 1996 by the World Bank and the International Monetary Fund (IMF). The objective of the Initiative is to reduce the external debt of the most heavily indebted countries from unsustainable to sustainable levels. The Initiative is designed to provide substantial debt relief to countries that implement critical social and economic reforms as part of an integrated approach to sustainable development and is used specifically in cases where traditional debt relief mechanisms are not enough to help countries exit from the rescheduling process.
In September 1999, the DRTF Initiative was significantly expanded to provide deeper, broader and faster debt relief and strengthened the links between debt relief, poverty reduction, and social policies. This enhancement and redesigned strategy to link debt relief to poverty reduction helps to eliminate debt as an obstacle to development and allow countries to invest more in their future. In 2005, to help accelerate progress toward the United Nations Millennium Development Goals (MDGs), the DRTF Initiative was supplemented by the Multilateral Debt Relief Initiative (MDRI). Forty countries are registered as eligible or potentially eligible countries.
The resources of the DRTF are managed by the International Development Association (IDA) as administrator, on the basis of decisions made by donors and by multilateral creditors.
CFPMI is responsible for the day-to-day trustee operations of the DRTF. It manages the donor contribution process, including the receipt and the allocation of funds, and disbursements of funds in accordance with donor decisions. CFPMI also manages the flow of funds to creditors and provides periodic reports to donors. From time to time, donors meet to discuss the financial situation of the trust fund, assess the funding needs and commit new pledges to finance the debt relief operations of the DRTF.