The G-8 Debt Cancellation Proposal and Its Implications for the Fund

Prepared by the Policy Development and Review, Legal and Finance Departments
In consultation with other departments

July 20, 2005

Use the free Adobe Acrobat Reader to view the full text (201KB pdf file).

  1. Introduction
  2. Description of the G-8 Proposal
  3. Financial Implications of the Proposal for the Fund
    1. Cost of the G-8 Proposal
    2. Financing Needs and Sources
    3. Mitigating the Impact on the Fund’s Finances
    4. Future Fund Lending
          Future Fund Lending to HIPCs
          Estimated Resource Needs of the PRGF
          Estimated Resource Needs of the Shocks Window
  4. Legal and Policy Issues Raised by the Proposal
    1. Eligibility and Uniformity of Treatment
          Background and General Principles
          Assessing the G-8 Proposal
    2. Conditionality
    3. Potential Implications of the Proposal for Fund Instruments
          The Self-Sustained PRGF
          The Policy Support Instrument (PSI)
          The PRGF Shocks Window
    4. Implications for the Low-Income Country Debt Sustainability Framework
  5. Approvals and Other Actions Needed to Effect the Proposal
  6. Issues for Discussion


1. Country Coverage of the G-8 Proposal
2. Fund Credit Outstanding to 35 HIPCs, December 2004–December 2005
3. Fund Credit Outstanding and Projected Principal Repayments of 35 HIPCs
4. Fund Credit Outstanding to 35 HIPCs
5. Incremental Cost of Proposed Additional Debt Relief to 35 HIPCs
6. Existing Resources Earmarked for HIPC Debt Reduction Operations and Concessional Lending
7. Policy Performance and Per-Capita Income of Selected Groups of Countries
8. Current Program Status of Post-Completion-Point HIPCs


Impact of G-8 Proposal on HIPCs, 2004


1. The PRGF Reserve Account
2. Financial Impact of Use of SDA Resources
3. Demand Estimates for PRGF Resources


Summary of Bilateral Contributions to the PRGF and PRGF-HIPC Trusts