Supporting agreements with the international institutions
IMF program approved on March 25, 1999
Amounts treated
$1 062 million
Categories of debt treated
Treatment of arrears as of June 30, 1999
Treatment of maturities falling due from April 01, 1999 up to December 31, 2000
Repayment profile
Treatment under Naples terms (cancellation rate of 67%)
- repayment of non ODA credits over 23 years, with 6 years of grace, after cancellation to a rate of 67%
- repayment of ODA credits over 40 years with 16 years of grace
Specific provisions
Possibility to conduct debt swaps
On a voluntary and bilateral basis, the Government of each participating creditor country or its appropriate institutions may sell or exchange, in the framework of debt for nature, debt for aid, debt for equity swaps or other local currency debt swaps : (i) the amounts of outstanding loans [treated in the Agreed Minute] as regards official development aid loans ; (ii) the amounts of other outstanding credits, loans and consolidations [treated in the Agreed Minute], up to 20% of the amounts of outstanding credits as of June 30, 1992 or up to an amount of 20 million SDR, whichever is higher.
Entry-into-force provision
The provisions of the Agreed Minute will come into force provided that the Government of the Republic of Zambia has made all payments due to Participating Creditor Countries due pursuant to [...] the Agreed Minute, and following notification by the Chairman of the Paris Club.
Agreement implemented on March 31, 2000
Good will clause
In response to the request of the representatives of the Government of the Republic of Zambia:
a) the Participating Creditor Countries agreed in principle to a meeting to consider the matter of the Republic of Zambia's debt service payments falling due after March 31, 2002 and relating to loans or credits pursuant to a contract or other financial arrangement concluded before January 1, 1983, provided:
- that the Republic of Zambia continues to have an appropriate arrangement with the International Monetary Fund ;
- that the Republic of Zambia has reached with other creditors effective arrangements meeting the conditions [treated in the Agreed Minute] and has reported in writing to the Chairman of the Paris Club, pursuant to [the Minute] ;
- and that the Republic of Zambia has complied with all conditions set out in this Agreed Minute.
b) alternatively, if as at April 1, 2002, the Government of the Republic of Zambia has maintained satisfactory relations with the Participating Creditor Countries, and notably has fully implemented all agreements signed with them and continues to have an appropriate arrangement with the International Monetary Fund, the Participating Creditor Countries agree in principle to hold a meeting to consider the matter of the Republic of Zambia's stock of debt.
Special account
To facilitate the implementation of this Agreed Minute, the Government of the Republic of Zambia will deposit in the special account established with the Bank for International Settlements, the equivalent of at least SDR 3,3 million at the end of each month, commencing in July 1999 through March 2002 inclusive. The Government of the Republic of Zambia undertakes to have this Bank notify the Chairman of the Paris Club as soon as each deposit has been made. The total amount approximates the amounts estimated to be payable to all Participating Creditor Countries from April 1, 1999 up to March 31, 2002 inclusive under the terms of the bilateral agreements to be concluded pursuant to this Agreed Minute. As specific payments under these agreements become due, the Government of the Republic of Zambia will draw on the special account to meet these payments ; no drawing will be made on the special account for any other use before all payments due from April 1, 1999 up to March 31, 2002 inclusive under these agreements have been made. Any drawing on this account will be made after a previous 15-day notice to the above Bank, which this Bank will notify immediately to the Chairman of the Paris Club. This scheme could be continued by agreement between the parties.
Phases
- First phase : From April 01, 1999 up to March 31, 2000, implemented on March 31, 2000
- Second phase : From April 01, 2000 up to March 31, 2001, implemented on September 22, 2000
De minimis threshold of 500 000 SDR
Payment of non-consolidated amounts before June 30, 1999
Comparability of treatment provision
In order to secure comparable treatment of its debt due to all its external public or private creditors, the Government of the Republic of Zambia commits itself to seek promptly from all its external creditors debt reduction and reorganization arrangements on terms comparable in net present value to those set forth in the Agreed Minute for credits of comparable maturity. Comparability of treatment for debt reduction in net present value is assessed not only on the basis of the reduction in the face value of the debt but also on the terms of repayment of the debts not cancelled.
Consequently, the Government of the Republic of Zambia commits itself to accord all categories of creditors -and in particular creditor countries not participating in the Agreed Minute, commercial banks and suppliers- a treatment not more favourable than that accorded to the Participating Creditor Countries.
For the purpose of the comparison between the arrangements concluded by the Government of the Republic of Zambia with its creditor countries not listed in the present Agreed Minute on the one hand, and with the Participating Creditor Countries on the other hand, all relevant elements will be taken into account, including the real exposure of the creditor countries not listed in the Agreed Minute, the level of cash payments received by those creditor countries from the Government of the Republic of Zambia as compared to their share in the Republic of Zambia's external debt, the nature and characteristics of all treatment applied, including debt buy backs, and all characteristics of the reorganized claims and in particular their repayment terms whatever forms they take and in general the financial relations between the Government of the Republic of Zambia and the creditor countries not listed in the Agreed Minute.
Organisation of the session
Have attended: