SIERRA LEONE Debt Treatment - January 24, 2007

The Republic of Sierra Leone was declared eligible to the enhanced HIPC Initiative by the IDA and the IMF in 2002 and was declared to have reached its Completion Point on 15 December 2006. In this context, the Republic of Sierra Leone 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 Sierra Leone’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 Sierra Leone and creditor countries not listed in these Agreed Minutes.

Consequently, the Republic of Sierra Leone 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