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.

In March 2006, donors agreed to a financing package for the MDRI that stipulates 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 commitments already made, and donors are undertaking further steps in their home countries to provide additional financing commitments over time.