The Paris Club of creditor nations has agreed to wipe out $75 million in debt service payments owed by Guinea-Bissau, said the West African country’s finance minister.
According to the Paris Club, Guinea-Bissau owed its members a total of more than $240 million at the start of the year.
“Guinea-Bissau has obtained from the Paris Club forgiveness of $75 million in debt service,” Jose Mario Vaz told journalists.
The debt relief is conditional on the country reaching the Highly Indebted Poor Countries (HIPC) completion point, he said.
HIPC is an initiative launched by the World Bank and International Monetary Fund in 1996 to provide a framework in which creditors can reduce the amounts owed to them by the world’s poorest and most indebted countries.
“Paris Club creditors agreed…with the Government of the Republic of Guinea-Bissau to alleviate its external public debt,” the Paris Club said in statement dated July 6.
“These measures are expected to reduce by more than 98 percent the debt service including the arrears due by the Republic of Guinea-Bissau to Paris Club creditors between 1st January 2010 and 31 December 2012,” it said.