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OP 14.10 - External Debt Reporting and Financial Statements


These policies were prepared for use by World Bank staff and are not necessarily a complete treatment of the subject.
OP 14.10
October, 1999
 

This Operational Policy was revised to reflect the current IBRD and IDA General Conditions that took effect on July 1, 2005 and updated BP 14.10, Annexes AB, and B1.

Note: OP and BP 14.10 replace the versions dated September 1994.  Questions may be addressed to the Director, Development Data Group, DEC.

 

1.     The Bank1needs reliable and timely external debt information to (a) assess a borrowing country's foreign debt situation, creditworthiness, and economic management; and (b) conduct its country economic work 2and assess regional and global indebtedness and debt servicing problems.  The Bank’s General Conditions require a borrowing or guaranteeing member country to “furnish to the Bank all such information as the Bank shall reasonably request with respect to financial and economic conditions in its territory, including its balance of payments and its external debt." 3  Consequently, the Bank requires such countries to report their external debt 4and may require borrowers or beneficiaries other than member countries to provide representations regarding their financial statements.

Debt Reporting

 

2.     The external debt that a country must report to the Bank includes: (a)  public debt with an original maturing of one year or more, contracted or guaranteed by the government of the country or its political subdivisions, the central bank, and other agencies; and  (b) private, nonguaranteed debt.

 

3.     Basic reporting consist of the following: (a)  annual summary reports showing, for each public or publicly guaranteed debt extant at the end of the reporting period or repaid or canceled during the period, the amount of debt committed, undisbursed, repaid, and outstanding and disbursed, and transactions that have taken place during the year; and, for private  on guaranteed debt, aggregate amounts outstanding, projected future service payments, and transactions during the year by source and type.5  These annual reports are due within three months after the end of the reporting period.  (b)  Quarterly reports showing detailed information on each new commitment of a public or publicly guaranteed debt received during the period.  These reports are due within one month after the end of the quarter.

 

4.      As a condition of Board presentation of loans and credits, each borrowing or guaranteeing country must submit a complete report (or an acceptable plan of action for such reporting) on its foreign debt.

 

5.      At each loan/credit signing, the country provides a Letter on financial and Economic Data.6

 

Financial Statements

 

6.      In connection with each loan for which the financial condition of a borrower or beneficiary other than a member country is a material factor in the Bank’s decision to make the loan, the Bank may require an appropriately signed representation certificate7stating that (a) any financial statements submitted present fairly the position of the borrower and/or the beneficiary as of a certain date, and  (b) no material adverse change has occurred in the financial position since that date, except as may be stated in the certificate.  The date of the certificate is the same as the date of the Loan Agreement.

 

7.     As a condition of effectiveness, the IBRD may require from a borrower other than a member country an additional certificate that the condition of the borrower as previously represented has undergone no material adverse change since then.8

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1    “Bank” includes IBRD and IDA.

2    Particularly Country Economic Memoranda (see Annex A of OD 2.00, Country Economic and Sector Work) and Country Assistance Strategies (See BP 2.11, Country Assistance Strategies).

3    Article VI of the IBRD General Conditions and Section 5.01 of the IDA General Conditions.

4    The reporting procedures to be used by countries are set out in the World Bank Debtor Reporting System Manual, dated January 2000.

5    Since information on private debt is not directly under the control of governments, the borrowing country may need to make special arrangements to obtain effective reports.

6    For samples, see BP 14.10, Annexes A  and B.

7    For a sample, see BP 14.10, Annex C.

8    See IBRD General Conditions, Section 9.01 (b).




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