Contacts: Amy Stilwell 202-458-4906 astilwell@worldbank.org Christian Hofer 202-458-0936 chofer@worldbank.org WASHINGTON, April 21 - The World Bank announced today that the Multilateral Debt Relief Initiative has been approved, clearing the way for cancellation of International Development Association (IDA) debt to some of the world’s poorest countries. Starting on July 1, 2006, IDA is expected to provide more than US$37 billion in debt relief over 40 years. “We have secured the total votes necessary to enact the Multilateral Debt Relief initiative,” said World Bank President Paul Wolfowitz. “Countries will now be able to put more resources into programs that directly help those who need it most - the poor who need better education, better health services and greater access to clean water, for example.” Voting on the initiative remains open until April 28. Background: At the July 2005 G8 Summit in Gleneagles, Scotland, G8 leaders pledged to cancel the debt of the world’s most indebted countries, most of which are located in Africa. Debt cancellation will be provided by the International Development Association IDA of the World Bank, the International Monetary Fund and the African Development Fund to countries that have graduated (called reaching the “completion point”) from the Enhanced Heavily Indebted Poor Countries (HIPC) Initiative. Initially, 17 HIPC countries will be eligible for 100 percent debt cancellation: Benin, Bolivia, Burkina Faso, Ethiopia, Ghana, Guyana, Honduras, Madagascar, Mali, Mozambique, Nicaragua, Niger, Rwanda, Senegal, Tanzania, Uganda and Zambia. Mauritania has completed the HIPC program, but will qualify for relief after implementing key public expenditure management reforms. The remaining HIPC countries will be eligible for debt cancellation once they have completed the requirements of the HIPC Initiative. Donors have agreed to a financing package that calls for additional donor contributions over time to ensure delivery of fresh resources for poverty reduction. Compensatory financing over the duration of the cancelled loans will be based on strong indicative pledges already made, and donors are undertaking the necessary steps in their home countries to provide their financing commitments.
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