AfDB Approves Debt Relief for Guinea-Bissau

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Tunis, 26 January 2011 - The Boards of Directors of the African Development Bank (AfDB) Group, on 26 January 2011, agreed that Guinea-Bissau had met the conditions and requirements to qualify for debt relief under the Heavily Indebted Poor Countries (HIPC) Initiative.

Accordingly, Guinea-Bissau will benefit from a USD 60.4-million AfDB Group debt-relief. In addition, and on an exceptional basis, the country will benefit from an estimated USD 23.7- million additional debt cancellation.

Guinea-Bissau qualified for debt relief under the HIPC Initiative, after having demonstrated significant progress in stabilizing its economy and implementing sound policies in favour of political, socio-economic and financial growth and poverty reduction.

To reach completion point, the country fulfilled almost all the conditionalities. It is developing a full Country Strategy Paper, maintaining macroeconomic stability, improving governance and services in the education and health sectors.

The assessment by the AfDB Group, the International Monetary Fund and the World Bank concluded that having implemented the agreed measures, Guinea-Bissau had met the requirements for debt relief under the HIPC initiative.

Guinea-Bissau is also eligible for additional debt relief under the Multilateral Debt Relief Initiative (MDRI), estimated at USD 131.4 million.

Since the beginning of cooperation with Guinea-Bissau in 1976, the Bank Group has financed 38 operations (24 projects, 7 institutional support programs, 3 studies, 3 humanitarian assistance operations and 1 emergency line of credit), bringing net commitments to  UA 188.08 million (about FCFA 146 billion), excluding multinational projects. This amount comprises loans (80.02%) and grants (19.98%). The social sector was the largest recipient (31.2%), followed by multi-sector (21.0%) and agriculture (19.4%), transport (18.4 %) and utilities (10%)

Guinea-Bissau is the 26th AfDB regional member country that has attained the decision point under the HIPC Initiative.

1 Unit of Account (UA) = US$ 1.54 (as at January 2011)

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