GUINEA Debt Treatment - January 23, 2008

• repayment of non ODA credits over 23 years , with 6 years of grace , after cancellation to a rate of 90%
• repayment of ODA credits over 40 years with 16 years of grace

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 as regards ODA debts with the exception of the loans administered by IDA and provided by the European Union member states.

(ii) the amounts of other outstanding credits, loans and consolidations with the exception of the loans administered by IDA and provided by the European Union member states, up to 20% of the amounts of outstanding loans, credits and consolidations as of 31 December 1992 or up to an amount of 20 million SDR, whichever is higher.
 

good will clause

Given the decision by Paris Club Creditors to contribute to the exceptional assistance in favour of the Government of the Republic of Guinea under the Enhanced HIPC Initiative, the Participating Creditor Countries declare their readiness in principle to hold a meeting at the Completion Point designed to examine the question of the Republic of Guinea’s outstanding debt stock and to make the necessary effort in favour of the Republic of Guinea to allow it to reach the objective of its debt sustainability in the context of an equitable burden sharing among creditors, provided that:

- the Government of the Republic of Guinea maintains satisfactory relations with the Participating Creditor Countries and a sound adjustment track record;

- the Executive Boards of the IMF and the IDA decide that the Republic of Guinea has reached its Completion Point under the enhanced HIPC initiative.

Phases

• First phase : From January 01, 2008 up to December 31, 2008 implemented at the signature of the agreement
• Second phase : From January 01, 2009 up to December 31, 2009 not implemented yet
• Third phase : From January 01, 2010 up to December 31, 2010 not implemented yet

The Republic of Guinea was declared eligible to the Enhanced HIPC initiative by the IDA and the IMF in 2000 and was declared to have reached its Decision Point in December 2000. In this context, the Republic of Guinea commits to seek promptly from all its external creditors which are not participating in these Agreed Minutes, their appropriate contribution in terms of debt relief to the enhanced HIPC initiative, on top of traditional debt relief mechanisms and consistent with the proportional burden sharing based on their relative exposure in net present value of total external debt at Decision Point after the full use of traditional debt relief mechanisms.

The appropriate nature of the debt relief provided will be assessed not only on the basis of the reduction in the net present value of the debt as computed under Appropriate Market Rate, but also on the terms of repayment of the debts not cancelled. For this purpose, all relevant elements will be taken into account, including the level of cash payments received by those creditors as compared to their share in the Republic of Guinea’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 Republic of Guinea and creditor countries not listed in these Agreed Minutes.

Consequently, the Republic of Guinea commits not to accord any category of creditors -and in particular creditor countries not participating in these Agreed Minutes, commercial banks, suppliers and bondholders- a treatment more favourable than that accorded to the Participating Creditor Countries.

Participating creditors

Observers

Press release