Summary: September 18, 2002: The EU grants another Euro 60 million debt relief for Highly Indebted Poor Countries (HIPC) within African, Caribbean and Pacific Countries (ACP) (Brussels)
The EU decided to grant a further € 60 million debt relief in order to cancel all the special loans owed to the EU and managed by the European Investment Bank (EIB) at special interest rates. With this new grant the EU goes beyond the enhanced Highly Indebted Poor Countries (HIPC) Initiative of international donors and confirms its commitment to helping the least developed ACP countries.
The EU has strongly backed the HIPC initiative since its inception in 1996, and intervenes as creditor as well as donor.
The HIPC initiative is an international co-ordinated approach to bring down poor countries' external debt to a sustainable level. The initiative involves both bilateral and multilateral public creditors as well as commercial creditors.
This € 60 Million is in addition to the € 360 million that have been earmarked so far for debt cancellation for EU loans. This part of the financial support under HIPC is administered by the EIB and forms part of the EU's intervention as creditor.
The EU as a donor channels its assistance through the HIPC Trust Fund, which is managed by the World Bank, in favour of African, Asian and Latin American countries. This assistance amounts to € 734 million.
Including this € 60 million, the EU has now lightened the debt of highly indebted poor countries by a total of € 1,15 billion .
Background
The Highly Indebted Poor Countries (HIPC) Initiative was launched in 1996 and enhanced in 1999. The overall aim of the initiative is to bring the external debt of poor countries under sustainable level. Debt rescheduling and partial forgiveness are the two relief mechanisms used. The HIPC initiative includes both official and private creditors, both bilateral and multilateral.
There are currently 42 countries eligible for HIPC, the majority of which being from sub-Saharan Africa. By July 2002, 26 countries reached decision point making them eligible for interim relief. Among the 26, six countries (Bolivia, Uganda, Mozambique, Tanzania, Burkina Faso and Mauritania) have reached completion point, making them eligible for irrevocable relief.
Further information on the EU participation in the debt relief initiative for HIPC can be found on:
http://europa.eu.int/scadplus/printversion/en/lvb/r12401.htm
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