Poverty Reduction Strategy Papers
Poverty Reduction Strategy Papers—Proposed Amendments to the Poverty Reduction and Growth Facility (PRGF) Trust and the PRGF-HIPC Trust Instruments
November 4, 2004
Public Information Notice: IMF Executive Board Reviews the Role of the Fund in Low-Income Member Countries
September 30, 2004
Poverty Reduction Strategy Papers -- A Factsheet
The IMF's Poverty Reduction and Growth Facility (PRGF) -- A Factsheet
Debt Relief Under the Heavily Indebted Poor Countries (HIPC) Initiative-- A Factsheet
PRGF-HIPC Trust Instrument—Amendments to Eligibility
Prepared by the Legal Department
(In consultation with the Policy Development and Review and Finance Departments)
October 7, 2004
1. This paper proposes amendments to the PRGF-HIPC Trust Instrument1 to give effect to the conclusions reached by the Executive Board in September 2004 to extend the sunset clause to end-2006 and modify the eligibility criteria under the enhanced HIPC Initiative to limit the application of the extension of the sunset clause to the IDA-only/PRGF-eligible countries that have not yet benefited from HIPC debt relief and are assessed to have external public debt in excess of the enhanced HIPC thresholds after full application of traditional debt mechanisms based on end-2004 data.2
2. The proposed decision would introduce the requisite amendments into the PRGF-HIPC Trust Instrument. The following two points on the amendments should be highlighted:
3. Under the new framework, a closed list of member countries eligible for consideration of debt relief under the enhanced HIPC Initiative would be expected to be established by mid-2005, on the basis of end-December 2004 data, and that list will be presented for information of the Fund and Bank Executive Boards at that time.3
The following decision, which may be adopted by a majority of the votes cast, is proposed for adoption by the Executive Board:
The Instrument to Establish a Trust for Special PRGF Operations for the Heavily Indebted Poor Countries and Interim PRGF Subsidy Operations (annexed to Decision No. 11436-(97/10), adopted February 4, 1997) is amended, as follows:
a. Section III, Paragraph 1(b) shall be amended by deleting "December 31, 2004" and replacing it with "December 31, 2006."
b. Section III, Paragraph 1(d) shall be added, effective January 1, 2005, as follows:
1The Instrument to Establish a Trust for Special PRGF Operations for the Heavily Indebted Poor Countries and Interim PRGF Subsidy Operations (annexed to Decision No. 11436-(97/10), adopted February 4, 1997) as amended, (the "PRGF-HIPC Trust Instrument") Selected Decisions, Twenty-Eighth Issue, December 31, 2003, pp. 106-19.
2The Acting Chair's Summing Up, HIPC Initiative-Status of Implementation, EBM 04/83, 09/03/04. The World Bank Executive Board in substance reached the same conclusion, IDA/R2004/0234.
3Directors agreed on the importance of examining any proposal for further extension of the sunset clause in light of available financing. See The Acting Chair's Summing Up, HIPC Initiative-Status of Implementation, EBM 04/83, 09/03/04.