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Development cooperation, 11/10/2014

KV.RAH.LAIT/Multilateral Debt Relief Iniative MDRI in IDA and AfDF

Description

On July 1, 2006, the Multilateral Debt Relief Initiative (MDRI), which will cancel the International Development Association (IDA) debt of some of the world’s poorest countries, will take effect. Under the MDRI, IDA is expected to provide about US$37 billion in debt relief over 40 years. This is in addition to approximately US$17 billion of debt relief already committed by IDA under the Enhanced Heavily Indebted Poor Countries (HIPC) Initiative. The MDRI was launched at the July 2005 G8 Summit in Gleneagles, Scotland, where G8 leaders pledged to cancel the debt of the world’s most indebted poor countries, most of which are located in Africa. Their proposal required full debt cancellation by the International Development Association (IDA), the International Monetary Fund (IMF) and the African Development Fund (AfDF) to countries that have completed the HIPC Initiative. The MDRI provides irrevocable, upfront debt stock cancellation. The objective is to provide additional support to Heavily Indebted Poor Countries (HIPCs) to reach the Millennium Development Goals (MDGs), while preserving the financing capacity of the International Financial Institutions. Eligible Countries: As stipulated by the G8, countries that have “graduated” from the HIPC Initiative (called reaching the “completion point.”) are eligible for additional debt relief under the MDRI. Initially, 19 countries are expected to receive 100 percent cancellation of their eligible debt: Benin, Bolivia, Burkina Faso, Cameroon, Ethiopia, Ghana, Guyana, Honduras, Madagascar, Mali, Mauritania, Mozambique, Nicaragua, Niger, Rwanda, Senegal, Tanzania, Uganda and Zambia. The remaining HIPC countries (see HIPC Web Site) will be eligible for debt cancellation once they have completed the requirements of the HIPC Initiative. There is no new conditionality, but “once-off” assessments were conducted for the 19 HIPCs that have already reached completion point to determine whether there had been any deterioration in performance since reaching the completion point. Initially, Mauritania did not meet the eligibility requirements, but has since taken steps to improve its public finance management. Mauritania’s participation was reconfirmed by the IDA Board on June 27.

Funding decision 11/10/2014

32 772 270 €

Target region

Developing countries (not specified)

Field of activity

Debt forgiveness 100%

Type of aid

Core contributions to multilateral institutions

Funding channel

IDA - Monenkeskinen velkahelpoitusaloite
Afrikan kehitysrahasto

Contact

keo-50

Code for the object of funding

80700168

ID

UHA2014-046948

Created date

10/24/2014

Modified

12/1/2015

Case state

Decision-making
Financing decision
Decision

Case status

Pending

This document

Updated 8/30/2016

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