Abstract
Update on the Financing of Poverty Reduction and Growth Facility (PRGF) and Heavily Indebted Poor Countries (HIPCs) Operations and the Subsidization of Post-Conflict Emergency Assistance
I. Introduction and Summary
1. This paper provides the semi-annual update on the financing of PRGF and HIPC operations and the subsidization of post-conflict emergency assistance. The previous update was issued in March 2003 (SM/03/100, 3/21/03). The key features of the PRGF and PRGF-HIPC Trusts—the framework under which PRGF and HIPC operations are conducted—are summarized in Box 1. As required under an earlier Board decision,1 the paper also reviews the adequacy of the Reserve Account of the PRGF Trust. A draft decision on the adequacy is proposed for adoption by the Executive Board in Section VI.
Overview of the PRGF and PRGF-HIPC Trusts
PRGF Trust
The PRGF Trust was commenced in 1988 and enlarged in 1994 and 2002. Loan resources in the Trust have been provided by 17 lenders and subsidy contributions by a larger number of member countries. As of end-July 2003, total loan resources amounted to SDR 15.8 billion, of which SDR 2.6 billion has not yet been committed to PRGF borrowers.
Loans to the PRGF Trust have been secured by a Reserve Account, which has been financed through a recycling of profits from gold sales in late 1970s (i.e., reflows of SAF and Trust Fund repayments) and investment returns on balances held in the account.
PRGF-HIPC Trust
The framework for the HIPC Initiative and for interim PRGF subsidy operations during 2002-05 (the so-called interim period) was established in early 1997. Agreement was reached in late 1999 on the financing of the subsidy requirement for the interim PRGF and the Fund’s participation in the HIPC Initiative. Contributions have been provided by the Fund itself and 93 member countries.
The PRGF and PRGF-HIPC Trusts were amended in September 2001 to permit interim lending to be conducted through the PRGF Trust and to allow transfers of resources in the Trust Account of the PRGF-HIPC Trust not earmarked for HIPC operations to the Subsidy Account of the PRGF Trust if resources in the latter are insufficient for subsidizing interim lending.
PRGF beyond 2005
It has been envisaged that PRGF operations after 2005 would be financed through a revolving use of the resources accumulating in the PRGF Reserve Account (the so-called self-sustained PRGF). Other modalities of financing will also be considered.
2. The main points of the paper are as follows:
PRGF loan resources available to the PRGF Trust stood at SDR 2.6 billion as of end-July 2003, which would allow new lending at an annual average of SDR 1.1 billion through end-2005, broadly in line with earlier estimates.
Resources accumulating in the Reserve Account of the PRGF Trust amounted to SDR 3.1 billion at end-July, more than sufficient to meet forthcoming repayment obligations to PRGF Trust lenders during the next six months.
Under current projections, PRGF subsidy and HIPC grant resources are estimated to be sufficient to cover the cost of subsidizing PRGF lending through end-2005 and of the Fund’s participation in the enhanced HIPC Initiative.
Projections also indicate that available resources could accommodate the Fund’s share of potential HIPC Initiative topping-up assistance of about SDR 44 million (in NPV terms) estimated under the current methodology, but not the higher cost implied under Alternative Methodology I.2
Beyond 2005, the projected lending capacity of about SDR 660 million per year under the so-called self-sustained PRGF would be low relative to the recent trend in annual commitments and might, therefore, not adequately provide for the continuing role of the Fund in low-income countries. Staff has begun to examine other financing options that would allow a PRGF lending capacity at close to historical levels (about SDR 1 billion per year) after 2005. A Board paper on financing issues is planned for later this year.
Substantial PRGF loan and subsidy resources, as well as grants required for HIPC assistance, would need to be mobilized to address the protracted arrears and debt problems facing Liberia, Somalia, and Sudan. In particular, urgent efforts are required to mobilize the necessary financing in the case of Sudan.
On subsidization of post-conflict emergency assistance, since the last update, additional subsidies have been provided to four member countries. Available grant contributions are estimated to be adequate to subsidize charges on such assistance through at least end-2004.
3. Staff proposes that this paper be made public on the Fund’s external website, as was done with previous reports.
II. Financing of Current PRGF and HIPC Operations
PRGF Loan Resources
4. Loan resources remaining under the PRGF Trust are estimated to be sufficient to finance PRGF lending at an annual average level of SDR 1.1 billion through end-2005, as broadly envisaged in previous reports (Figure 1). As of end-July 2003, total loan resources provided by lenders to finance PRGF operations had amounted to SDR 15.8 billion. With SDR 13.1 billion having been already committed to PRGF-eligible member countries, a remaining balance of SDR 2.6 billion can be used through 2005. During the first seven months in 2003, the Executive Board approved seven new PRGF arrangements, totaling SDR 0.9 billion, including the large quota cases of Bangladesh and Sri Lanka. Based on information provided by area departments, additional new PRGF commitments could amount to SDR 0.4 billion during the remainder of 2003. Thus far, the conflict in the Middle East, higher oil prices, and the prolonged slowdown in export market growth have not led to higher commitments of PRGF loans in 2003.
New PRGF Commitments, 1998-2005
(In millions of SDRs)
Citation: Policy Papers 2003, 039; 10.5089/9781498329163.007.A001
1/ Includes a new arrangement of SDR 1,034 million with Pakistan.PRGF Reserve Account
5. The Reserve Account of the PRGF Trust is designed primarily to provide security to the lenders of the PRGF Trust in the event of a delay or nonpayment by PRGF Borrowers.3 The Reserve Account has been financed by reflows of SAF and Trust Fund repayments and investment returns on balances held in the Account. In September 2001, both the PRGF and PRGF-HIPC Trusts were amended to allow PRGF loans to be provided through the PRGF Trust during 2002-05 and thus extend the coverage of the Reserve Account to interim PRGF loans.
6. At end-July 2003, the balance in the Reserve Account amounted to SDR 3.1 billion, up only marginally from the previous report, reflecting both investment returns in a low interest rate environment and the adverse impact of Zimbabwe’s arrears to the PRGF Trust.4 Zimbabwe’s arrears have necessitated repayments from the Reserve Account of about SDR 65 million to PRGF Trust lenders. The Reserve Account will be replenished when Zimbabwe settles its arrears to the PRGF Trust.
7. Resources available in the Reserve Account of the PRGF Trust are estimated to provide sufficient protection to PRGF Trust lenders. The balance in the Reserve Account is consistent with the historical level, which has averaged 40-45 percent of outstanding claims on the PRGF Trust, and is estimated to exceed by a factor of about six the projected repayment obligations (of about SDR 0.5 billion) falling due to PRGF Trust lenders through March 2004. A draft decision confirming the adequacy of Reserve Account balances is proposed for adoption by the Executive Board below.
PRGF Subsidies and HIPC Initiative Grants
8. The total cost of subsidizing PRGF lending and financing the Fund’s share of HIPC Initiative assistance is currently projected at SDR 7.2 billion on a cash basis (Table 1). The cost of subsidizing PRGF operations is estimated at SDR 5 billion, or about SDR 0.1 billion lower than previously estimated, owing to lower-than-expected interest paid to PRGF Trust lenders in the intervening period. The estimated cost of the Fund’s share of HIPC Initiative assistance, excluding potential topping-up at completion points, is about SDR 2.2 billion, or SDR 50 million higher than before. This increase mainly reflects a change in the estimated cost of the Fund’s HIPC Initiative assistance to the Democratic Republic of the Congo as a result of an upward revision of the debt stock in an updated debt sustainability analysis.
PRGF Subsidies and HIPC Initiative Grants
(In billions of SDRs on a cash basis)
Projections are based on the assumed annual interest rate of 5 percent, unchanged from the assumption used in the March 2003 update.
Equivalent to US$2.9 billion in 2002 NPV terms. Based on current projections, HIPC assistance will be fully disbursed by 2007.
PRGF Subsidies and HIPC Initiative Grants
(In billions of SDRs on a cash basis)
| Actual (as of June 2003) | Projected (July 2003-2019) 1/ | Total | |
|---|---|---|---|
| Sources | 5.3 | 2.3 | 7.6 |
| PRGF Trust | 3.6 | 0.5 | 4.1 |
| Bilateral contributions | 2.4 | 0.2 | 2.6 |
| Fund contributions | 0.4 | - | 0.4 |
| Interest income on balances | 0.8 | 0.3 | 1.1 |
| PRGF-HIPC Trust | 1.7 | 1.8 | 3.4 |
| Bilateral contributions | 0.8 | 0.4 | 1.1 |
| Fund contributions | 0.8 | 1.4 | 2.2 |
| Investment income from gold proceeds | 0.4 | 1.4 | 1.8 |
| Other contributions | 0.4 | 0.0 | 0.4 |
| Interest income on balances | 0.1 | 0.0 | 0.1 |
| Uses | 2.9 | 4.3 | 7.2 |
| PRGF Trust subsidies | 1.8 | 1.6 | 3.4 |
| PRGF-HIPC Trust | 1.1 | 2.6 | 3.7 |
| Fund’s cost of HIPC assistance 2/ | 1.1 | 1.1 | 2.2 |
| Interim PRGF subsidies | 0.0 | 1.5 | 1.5 |
PRGF Subsidies and HIPC Initiative Grants
(In billions of SDRs on a cash basis)
| Actual (as of June 2003) | Projected (July 2003-2019) 1/ | Total | |
|---|---|---|---|
| Sources | 5.3 | 2.3 | 7.6 |
| PRGF Trust | 3.6 | 0.5 | 4.1 |
| Bilateral contributions | 2.4 | 0.2 | 2.6 |
| Fund contributions | 0.4 | - | 0.4 |
| Interest income on balances | 0.8 | 0.3 | 1.1 |
| PRGF-HIPC Trust | 1.7 | 1.8 | 3.4 |
| Bilateral contributions | 0.8 | 0.4 | 1.1 |
| Fund contributions | 0.8 | 1.4 | 2.2 |
| Investment income from gold proceeds | 0.4 | 1.4 | 1.8 |
| Other contributions | 0.4 | 0.0 | 0.4 |
| Interest income on balances | 0.1 | 0.0 | 0.1 |
| Uses | 2.9 | 4.3 | 7.2 |
| PRGF Trust subsidies | 1.8 | 1.6 | 3.4 |
| PRGF-HIPC Trust | 1.1 | 2.6 | 3.7 |
| Fund’s cost of HIPC assistance 2/ | 1.1 | 1.1 | 2.2 |
| Interim PRGF subsidies | 0.0 | 1.5 | 1.5 |
9. The combined subsidy and grant resources available to the PRGF and PRGF-HIPC Trusts are projected to amount to SDR 7.6 billion, up slightly from the previous estimate.5 This projection is based on an assumed interest rate of 5 percent per annum for investment returns and on interest obligations due to the PRGF Trust lenders over the remaining life of the Trusts.6 As of end-August 2003, all pledged subsidy contributions to the PRGF Trust, as well as 98 percent of those pledged to the PRGF-HIPC Trust, had been made effective. Since the last update, Fiji and Tonga have made effective their contributions to the PRGF-HIPC Trust. Pledges from 10 countries amounting to SDR 32.2 million have still not been made effective (Table 2).
Pending Subsidy Contributions to the PRGF-HIPC Trust
(In millions of SDRs “as needed”; as of end-August 2003) 1/
“As needed” is defined in Appendix Table 6, footnote 3.
This is the remaining balance for Argentina and Gabon, which have already contributed SDR 16.2 million and SDR 2.5 million “as needed”, respectively, to the PRGF-HIPC Trust.
Pending Subsidy Contributions to the PRGF-HIPC Trust
(In millions of SDRs “as needed”; as of end-August 2003) 1/
| Venezuela | 20.4 | Dominican Republic | 0.5 |
| Argentina 2/ | 6.4 | Lebanon | 0.4 |
| Gabon 2/ | 1.9 | Grenada | 0.1 |
| Trinidad & Tobago | 1.6 | Vanuatu | 0.1 |
| Bahrain | 0.9 | Maldives | 0.01 |
| Total | 32.2 |
“As needed” is defined in Appendix Table 6, footnote 3.
This is the remaining balance for Argentina and Gabon, which have already contributed SDR 16.2 million and SDR 2.5 million “as needed”, respectively, to the PRGF-HIPC Trust.
Pending Subsidy Contributions to the PRGF-HIPC Trust
(In millions of SDRs “as needed”; as of end-August 2003) 1/
| Venezuela | 20.4 | Dominican Republic | 0.5 |
| Argentina 2/ | 6.4 | Lebanon | 0.4 |
| Gabon 2/ | 1.9 | Grenada | 0.1 |
| Trinidad & Tobago | 1.6 | Vanuatu | 0.1 |
| Bahrain | 0.9 | Maldives | 0.01 |
| Total | 32.2 |
“As needed” is defined in Appendix Table 6, footnote 3.
This is the remaining balance for Argentina and Gabon, which have already contributed SDR 16.2 million and SDR 2.5 million “as needed”, respectively, to the PRGF-HIPC Trust.
Summary of Bilateral Contributions to the PRGF and PRGF-HIPC Trusts
(In millions of SDRs; as of end-June 2003)
Less than SDR 5,000.
The calculations are based on actual interest rates through end-June 2003 and an assumed SDR interest rate of 5 percent per annum thereafter.
Excludes a loan commitment from the OPEC Fund for International Development of US$50 million (equivalent to SDR 37 million).
The term “as needed” refers to the nominal undiscounted sum of the projected delivery of HIPC assistance plus the profile of projected subsidy needs associated with PRGF lending during 2002-05.
Data as of end-August 2003.
Summary of Bilateral Contributions to the PRGF and PRGF-HIPC Trusts
(In millions of SDRs; as of end-June 2003)
| PRGF Trust | PRGF-HIPC Trust | |||
|---|---|---|---|---|
| Subsidy contributions “as needed” 1/ | Loan commitments 2/ | Subsidies and HIPC grant contributions “as needed” 3/ | Of which: Pending “as needed” 3/ | |
| TOTAL | 3,511.2 | 15,722.7 | 1,561.6 | 32.2 |
| Major industrial countries | 2,311.9 | 12,864.8 | 880.5 | -- |
| Canada | 205.7 | 700.0 | 48.8 | -- |
| France | 475.1 | 2,900.0 | 82.2 | -- |
| Germany | 198.8 | 2,750.0 | 127.2 | -- |
| Italy | 157.3 | 1,380.0 | 63.6 | -- |
| Japan | 725.7 | 5,134.8 | 144.0 | -- |
| United Kingdom | 370.4 | -- | 82.2 | -- |
| United States | 178.8 | -- | 332.6 | -- |
| Other advanced countries | 983.7 | 2,452.8 | 299.7 | |
| Australia | 15.8 | -- | 24.8 | -- |
| Austria | 62.7 | -- | 14.3 | -- |
| Belgium | 120.0 | 350.0 | 35.3 | -- |
| Denmark | 67.2 | 100.0 | 18.5 | -- |
| Finland | 42.3 | -- | 8.0 | -- |
| Greece | 39.6 | -- | 6.3 | -- |
| Iceland | 4.6 | -- | 0.9 | -- |
| Ireland | 8.3 | -- | 5.9 | -- |
| Israel | -- | -- | 1.8 | -- |
| Korea | 60.2 | 92.7 | 15.9 | -- |
| Luxembourg | 14.2 | -- | 0.7 | -- |
| Netherlands | 143.0 | 450.0 | 45.4 | -- |
| New Zealand | -- | -- | 1.7 | -- |
| Norway | 45.7 | 150.0 | 18.5 | -- |
| Portugal | 5.2 | -- | 6.6 | -- |
| San Marino | -- | -- | 0.05 | -- |
| Singapore | 32.3 | -- | 16.5 | -- |
| Spain | 25.2 | 708.4 | 23.3 | -- |
| Sweden | 187.2 | -- | 18.3 | -- |
| Switzerland | 110.0 | 601.7 | 37.0 | -- |
| Fuel exporting countries | 16.9 | 49.5 | 114.3 | 23.2 |
| Algeria | -- | -- | 5.5 | -- |
| Bahrain | -- | -- | 0.9 | 0.9 |
| Brunei Darussalam | -- | -- | 0.1 | -- |
| Gabon | -- | -- | 2.5 | 1.9 |
| Iran, Islamic Republic of | 2.0 | -- | 2.2 | -- |
| Kuwait | -- | -- | 3.1 | -- |
| Libya | -- | -- | 7.3 | -- |
| Nigeria | -- | -- | 13.9 | -- |
| Oman | -- | -- | 0.8 | -- |
| Qatar | -- | -- | 0.5 | -- |
| Saudi Arabia | 15.0 | 49.5 | 53.5 | -- |
| United Arab Emirates | -- | -- | 3.8 | -- |
| Republica Bolivariana de Venezuela | -- | -- | 20.4 | 20.4 |
| Other developing countries | 185.2 | 355.6 | 224.1 | 9.1 |
| Argentina | 35.4 | -- | 16.2 | 6.4 |
| Bangladesh | 0.9 | -- | 1.7 | -- |
| Barbados | -- | -- | 0.4 | -- |
| Belize | -- | -- | 0.3 | -- |
| Botswana | 2.2 | -- | 5.7 | -- |
| Brazil | -- | -- | 15.0 | -- |
| Cambodia | -- | -- | 0.04 | -- |
| Chile | 4.1 | -- | 4.4 | -- |
| China | 15.1 | 200.0 | 19.7 | -- |
| Colombia | -- | -- | 0.9 | -- |
| Cyprus | -- | -- | 0.8 | -- |
| Dominican Republic | -- | -- | 0.5 | 0.5 |
| Egypt | 13.5 | 155.6 | 1.3 | -- |
| Fiji 4/ | -- | -- | 0.1 | -- |
| Ghana | -- | -- | 0.5 | -- |
| Grenada | -- | -- | 0.1 | 0.1 |
| India | 13.3 | -- | 22.9 | -- |
| Indonesia | 6.0 | -- | 8.2 | -- |
| Jamaica | -- | -- | 2.7 | -- |
| Lebanon | -- | -- | 0.4 | 0.4 |
| Malaysia | 45.6 | -- | 12.7 | -- |
| Maldives | -- | -- | 0.01 | 0.01 |
| Malta | 2.1 | -- | 1.1 | -- |
| Mauritius | -- | -- | 0.1 | -- |
| Mexico | -- | -- | 54.5 | -- |
| Micronesia, F. S. | -- | -- | 0.00* | -- |
| Morocco | 9.8 | -- | 1.6 | -- |
| Pakistan | 3.9 | -- | 3.4 | -- |
| Paraguay | -- | -- | 0.1 | -- |
| Peru | -- | -- | 2.5 | -- |
| Philippines | -- | -- | 6.7 | -- |
| Samoa | -- | -- | 0.00* | -- |
| South Africa | -- | -- | 28.6 | -- |
| Sri Lanka | -- | -- | 0.6 | -- |
| St. Lucia | -- | -- | 0.1 | -- |
| St. Vincent and the Grenadines | -- | -- | 0.1 | -- |
| Swaziland | -- | -- | 0.01 | -- |
| Thailand | 17.3 | -- | 4.5 | -- |
| Tonga 4/ | -- | -- | 0.02 | -- |
| Trinidad and Tobago | -- | -- | 1.6 | 1.6 |
| Tunisia | 1.8 | -- | 1.5 | -- |
| Turkey | 11.7 | -- | -- | -- |
| Uruguay | 2.6 | -- | 2.2 | -- |
| Vanuatu | -- | -- | 0.1 | 0.1 |
| Vietnam | -- | -- | 0.4 | -- |
| Countries in transition | 13.5 | -- | 42.9 | -- |
| Croatia | — | -- | 0.4 | -- |
| Czech Republic | 13.5 | -- | 4.1 | -- |
| Estonia | -- | -- | 0.5 | -- |
| Hungary | -- | -- | 6.0 | -- |
| Latvia | -- | -- | 1.0 | -- |
| Poland | -- | -- | 12.0 | -- |
| Russian Federation | -- | -- | 14.6 | -- |
| Slovak Republic | -- | -- | 4.0 | -- |
| Slovenia | -- | -- | 0.4 | -- |
Less than SDR 5,000.
The calculations are based on actual interest rates through end-June 2003 and an assumed SDR interest rate of 5 percent per annum thereafter.
Excludes a loan commitment from the OPEC Fund for International Development of US$50 million (equivalent to SDR 37 million).
The term “as needed” refers to the nominal undiscounted sum of the projected delivery of HIPC assistance plus the profile of projected subsidy needs associated with PRGF lending during 2002-05.
Data as of end-August 2003.
Summary of Bilateral Contributions to the PRGF and PRGF-HIPC Trusts
(In millions of SDRs; as of end-June 2003)
| PRGF Trust | PRGF-HIPC Trust | |||
|---|---|---|---|---|
| Subsidy contributions “as needed” 1/ | Loan commitments 2/ | Subsidies and HIPC grant contributions “as needed” 3/ | Of which: Pending “as needed” 3/ | |
| TOTAL | 3,511.2 | 15,722.7 | 1,561.6 | 32.2 |
| Major industrial countries | 2,311.9 | 12,864.8 | 880.5 | -- |
| Canada | 205.7 | 700.0 | 48.8 | -- |
| France | 475.1 | 2,900.0 | 82.2 | -- |
| Germany | 198.8 | 2,750.0 | 127.2 | -- |
| Italy | 157.3 | 1,380.0 | 63.6 | -- |
| Japan | 725.7 | 5,134.8 | 144.0 | -- |
| United Kingdom | 370.4 | -- | 82.2 | -- |
| United States | 178.8 | -- | 332.6 | -- |
| Other advanced countries | 983.7 | 2,452.8 | 299.7 | |
| Australia | 15.8 | -- | 24.8 | -- |
| Austria | 62.7 | -- | 14.3 | -- |
| Belgium | 120.0 | 350.0 | 35.3 | -- |
| Denmark | 67.2 | 100.0 | 18.5 | -- |
| Finland | 42.3 | -- | 8.0 | -- |
| Greece | 39.6 | -- | 6.3 | -- |
| Iceland | 4.6 | -- | 0.9 | -- |
| Ireland | 8.3 | -- | 5.9 | -- |
| Israel | -- | -- | 1.8 | -- |
| Korea | 60.2 | 92.7 | 15.9 | -- |
| Luxembourg | 14.2 | -- | 0.7 | -- |
| Netherlands | 143.0 | 450.0 | 45.4 | -- |
| New Zealand | -- | -- | 1.7 | -- |
| Norway | 45.7 | 150.0 | 18.5 | -- |
| Portugal | 5.2 | -- | 6.6 | -- |
| San Marino | -- | -- | 0.05 | -- |
| Singapore | 32.3 | -- | 16.5 | -- |
| Spain | 25.2 | 708.4 | 23.3 | -- |
| Sweden | 187.2 | -- | 18.3 | -- |
| Switzerland | 110.0 | 601.7 | 37.0 | -- |
| Fuel exporting countries | 16.9 | 49.5 | 114.3 | 23.2 |
| Algeria | -- | -- | 5.5 | -- |
| Bahrain | -- | -- | 0.9 | 0.9 |
| Brunei Darussalam | -- | -- | 0.1 | -- |
| Gabon | -- | -- | 2.5 | 1.9 |
| Iran, Islamic Republic of | 2.0 | -- | 2.2 | -- |
| Kuwait | -- | -- | 3.1 | -- |
| Libya | -- | -- | 7.3 | -- |
| Nigeria | -- | -- | 13.9 | -- |
| Oman | -- | -- | 0.8 | -- |
| Qatar | -- | -- | 0.5 | -- |
| Saudi Arabia | 15.0 | 49.5 | 53.5 | -- |
| United Arab Emirates | -- | -- | 3.8 | -- |
| Republica Bolivariana de Venezuela | -- | -- | 20.4 | 20.4 |
| Other developing countries | 185.2 | 355.6 | 224.1 | 9.1 |
| Argentina | 35.4 | -- | 16.2 | 6.4 |
| Bangladesh | 0.9 | -- | 1.7 | -- |
| Barbados | -- | -- | 0.4 | -- |
| Belize | -- | -- | 0.3 | -- |
| Botswana | 2.2 | -- | 5.7 | -- |
| Brazil | -- | -- | 15.0 | -- |
| Cambodia | -- | -- | 0.04 | -- |
| Chile | 4.1 | -- | 4.4 | -- |
| China | 15.1 | 200.0 | 19.7 | -- |
| Colombia | -- | -- | 0.9 | -- |
| Cyprus | -- | -- | 0.8 | -- |
| Dominican Republic | -- | -- | 0.5 | 0.5 |
| Egypt | 13.5 | 155.6 | 1.3 | -- |
| Fiji 4/ | -- | -- | 0.1 | -- |
| Ghana | -- | -- | 0.5 | -- |
| Grenada | -- | -- | 0.1 | 0.1 |
| India | 13.3 | -- | 22.9 | -- |
| Indonesia | 6.0 | -- | 8.2 | -- |
| Jamaica | -- | -- | 2.7 | -- |
| Lebanon | -- | -- | 0.4 | 0.4 |
| Malaysia | 45.6 | -- | 12.7 | -- |
| Maldives | -- | -- | 0.01 | 0.01 |
| Malta | 2.1 | -- | 1.1 | -- |
| Mauritius | -- | -- | 0.1 | -- |
| Mexico | -- | -- | 54.5 | -- |
| Micronesia, F. S. | -- | -- | 0.00* | -- |
| Morocco | 9.8 | -- | 1.6 | -- |
| Pakistan | 3.9 | -- | 3.4 | -- |
| Paraguay | -- | -- | 0.1 | -- |
| Peru | -- | -- | 2.5 | -- |
| Philippines | -- | -- | 6.7 | -- |
| Samoa | -- | -- | 0.00* | -- |
| South Africa | -- | -- | 28.6 | -- |
| Sri Lanka | -- | -- | 0.6 | -- |
| St. Lucia | -- | -- | 0.1 | -- |
| St. Vincent and the Grenadines | -- | -- | 0.1 | -- |
| Swaziland | -- | -- | 0.01 | -- |
| Thailand | 17.3 | -- | 4.5 | -- |
| Tonga 4/ | -- | -- | 0.02 | -- |
| Trinidad and Tobago | -- | -- | 1.6 | 1.6 |
| Tunisia | 1.8 | -- | 1.5 | -- |
| Turkey | 11.7 | -- | -- | -- |
| Uruguay | 2.6 | -- | 2.2 | -- |
| Vanuatu | -- | -- | 0.1 | 0.1 |
| Vietnam | -- | -- | 0.4 | -- |
| Countries in transition | 13.5 | -- | 42.9 | -- |
| Croatia | — | -- | 0.4 | -- |
| Czech Republic | 13.5 | -- | 4.1 | -- |
| Estonia | -- | -- | 0.5 | -- |
| Hungary | -- | -- | 6.0 | -- |
| Latvia | -- | -- | 1.0 | -- |
| Poland | -- | -- | 12.0 | -- |
| Russian Federation | -- | -- | 14.6 | -- |
| Slovak Republic | -- | -- | 4.0 | -- |
| Slovenia | -- | -- | 0.4 | -- |
Less than SDR 5,000.
The calculations are based on actual interest rates through end-June 2003 and an assumed SDR interest rate of 5 percent per annum thereafter.
Excludes a loan commitment from the OPEC Fund for International Development of US$50 million (equivalent to SDR 37 million).
The term “as needed” refers to the nominal undiscounted sum of the projected delivery of HIPC assistance plus the profile of projected subsidy needs associated with PRGF lending during 2002-05.
Data as of end-August 2003.
10. Overall, PRGF subsidy and HIPC Initiative grant resources in both Trusts are currently projected to exceed the cost of PRGF subsidies and the Fund’s share of HIPC Initiative assistance (excluding any potential topping-up) by about SDR 0.4 billion on a cash basis (or SDR 0.2 billion in NPV terms). However, it is important to note that this projected surplus is not necessarily readily available for near-term financing purposes and is subject to significant uncertainties:
First, the projected net surplus of the PRGF and PRGF-HIPC Trusts, as discussed above, indicates possible resources available through 2019 on an undiscounted cash basis. There is, therefore, a time dimension to the projection, implying that this amount is not all currently available and that the use of this projected surplus cannot be heavily frontloaded in the early years.
Second, the resources in the two Trusts are not fully interchangeable. In particular, while subsidy resources available to the PRGF Trust can be used to subsidize PRGF operations during the so-called interim period (2002-05), they cannot be used for HIPC Initiative operations, including topping-up assistance. Indeed, most of the currently projected surplus is in the PRGF Trust and is earmarked for PRGF subsidies. In contrast, the available resources for HIPC Initiative assistance from the PRGF-HIPC Trust have almost been fully exhausted, and the investment income from gold proceeds will, therefore, likely need to be used in support of HIPC Initiative assistance starting in late 2003.7
Third, projected resource availability is highly sensitive to changes in the level of PRGF lending, the Fund’s cost of participating in the enhanced HIPC Initiative, and interest rates. In particular, as noted above, the projected surplus is based on an assumed interest rate of 5 percent per year. This surplus would be eliminated if the annual average interest rate were to exceed 5½ percent, as financing needs are more sensitive to interest rate changes than available resources.8 The analysis of the sensitivity of resource availability to various interest rate assumptions is provided in Table 3.
Table 3.Interest Rate Sensitivity of PRGF Subsidies and HIPC Grant Resources
(In billions of SDRs on a cash basis)
The projection is based on the assumption that no administrative expenses associated with PRGF operations will be reimbursed by the Reserve Account to the GRA beyond 2004 and that the reserve coverage ratio of about 40 percent will be maintained through the life of the PRGF Trust.
Table 3.Interest Rate Sensitivity of PRGF Subsidies and HIPC Grant Resources
(In billions of SDRs on a cash basis)
(Interest rate in percent per annum) 4.0 4.5 5.0 5.5 6.0 Resources in the PRGF and PRGF-HIPC Trusts 1.1 0.7 0.4 0.1 -0.3 Resources required 6.5 6.8 7.2 7.5 7.9 Resources available 7.5 7.6 7.6 7.6 7.6 Annual Commitment Capacity under the self-sustained PRGF 1/ 0.60 0.63 0.66 0.69 0.71 The projection is based on the assumption that no administrative expenses associated with PRGF operations will be reimbursed by the Reserve Account to the GRA beyond 2004 and that the reserve coverage ratio of about 40 percent will be maintained through the life of the PRGF Trust.
Table 3.Interest Rate Sensitivity of PRGF Subsidies and HIPC Grant Resources
(In billions of SDRs on a cash basis)
(Interest rate in percent per annum) 4.0 4.5 5.0 5.5 6.0 Resources in the PRGF and PRGF-HIPC Trusts 1.1 0.7 0.4 0.1 -0.3 Resources required 6.5 6.8 7.2 7.5 7.9 Resources available 7.5 7.6 7.6 7.6 7.6 Annual Commitment Capacity under the self-sustained PRGF 1/ 0.60 0.63 0.66 0.69 0.71 The projection is based on the assumption that no administrative expenses associated with PRGF operations will be reimbursed by the Reserve Account to the GRA beyond 2004 and that the reserve coverage ratio of about 40 percent will be maintained through the life of the PRGF Trust.
HIPC Initiative Topping-Up Assistance
11. The staff’s revised projections of potential topping-up costs at completion points remain broadly unchanged from the earlier estimates under the current methodology,9 and the projected additional cost to the Fund could be accommodated with available resources. As described in Enhanced HIPC Initiative—Considerations Regarding the Calculation of Additional Debt Relief at the Completion Point (SM/03/295, 8/18/03), under this methodology, total topping-up assistance by all creditors (including for post-completion point countries) would amount to US$877 million in 2002 NPV terms, of which the additional cost to the Fund would amount to US$61 million (equivalent to SDR 44 million).10 These are tentative estimates, which are highly sensitive to discount and exchange rate changes, and subject to revision as countries approach their completion points.11
12. The projected available resources would, however, not be able to accommodate the estimated cost under the alternative methodology of excluding additional bilateral assistance from topping-up calculations (Alternative Methodology I in the above mentioned topping-up paper) without risk to the financing of PRGF and HIPC operations. Using the baseline assumptions on the CIRR and interest rate in the topping-up paper, the overall additional cost under this methodology would more than double to US$2.3 billion in 2002 NPV terms, with the Fund’s share rising sharply to US$249 million (about SDR 179 million) (Table 4). The markedly higher cost associated with this alternative methodology could pose the following problems with respect to projected available resources:
Estimated Costs to the Fund of Potential Topping-up Assistance under the HIPC Initiative
(In NPV terms)
Exchange rates and 6-month average CIRR rates as of June 30, 2003.
Estimated Costs to the Fund of Potential Topping-up Assistance under the HIPC Initiative
(In NPV terms)
| Current methodology | Alternative Methodology I | |
|---|---|---|
| Baseline | ||
| In millions of U.S. dollars | 61 | 249 |
| In millions of SDRs | 44 | 179 |
| Updating to current parameters 1/ | ||
| In millions of U.S. dollars | 106 | 346 |
| In millions of SDRs | 76 | 249 |
Exchange rates and 6-month average CIRR rates as of June 30, 2003.
Estimated Costs to the Fund of Potential Topping-up Assistance under the HIPC Initiative
(In NPV terms)
| Current methodology | Alternative Methodology I | |
|---|---|---|
| Baseline | ||
| In millions of U.S. dollars | 61 | 249 |
| In millions of SDRs | 44 | 179 |
| Updating to current parameters 1/ | ||
| In millions of U.S. dollars | 106 | 346 |
| In millions of SDRs | 76 | 249 |
Exchange rates and 6-month average CIRR rates as of June 30, 2003.
First, the current low interest rate environment, while benefiting the PRGF and PRGF-HIPC Trusts as a whole, could pose constraints on the availability of resources earmarkedfor the HIPC Initiative in the short term. This is because: (i) the demand for such resources would be particularly high as HIPC Initiative assistance is heavily frontloaded; and (ii) as described earlier, any additional subsidy resources arising from lower interest rates in the PRGF Trust cannot be used for HIPC Initiative operations, including topping-up assistance. Thus, as the investment income on gold proceeds earmarked for HIPC Initiative assistance accumulates more slowly than is needed, a temporary transfer of resources from the Reserve Account may be required to provide liquidity support.12 As this transfer from the Reserve Account would only be repaid in later years, it could adversely affect the lending capacity of the self-sustained PRGF, particularly in the early years of its operation.
Second, committing to additional topping up would severely limit the ability of the Fund to meet any unanticipated frontloading of PRGF disbursements or additional HIPC debt relief for those countries which have not yet reached their decision points. As noted earlier, in the case of the Democratic Republic of the Congo, the Fund’s share of additional debt relief, owing to a delay in the decision point and an updated debt sustainability analysis, amounted to some SDR 50 million more than previously estimated.
Third, and most importantly, there is a high degree of uncertainty regarding the estimated cost to the Fund associated with Alternative Methodology I. Using updated parameters for the topping-up calculations,13 the overall additional cost would increase to US$3.4 billion in NPV terms, with the Fund’s share rising to US$346 million (about SDR 249 million). This higher cost to the Fund could not be accommodated within the current operating framework. Thus, should this alternative methodology be adopted, the Fund would commit resources to topping-up assistance of a highly uncertain and potentially large magnitude.
13. In the staff’s view, therefore, adopting Alternative Methodology I for calculating topping-up assistance would be a high risk endeavor. The much more costly topping-up approach would not only place at risk the currently projected small safety margin which allows the Fund to implement PRGF and HIPC operations as envisaged and respond to unanticipated developments with such operations, but—under plausible assumptions—the commitments could simply not be financed from available resources as currently projected.
III. Financing of PRGF Lending beyond 2005
14. It has been envisaged that, once currently available PRGF loan resources have been fully committed, the continuation of the Fund’s PRGF lending would be financed on a revolving basis from the resources accumulated in the Reserve Account of the PRGF Trust—the so called self-sustained PRGF. It is estimated that the accumulated balance in the Reserve Account could sustain annual PRGF loan commitments of about SDR 660 million in perpetuity, while maintaining Reserve Account coverage for claims on the PRGF Trust at the historical level of 40 percent. The projected level of self-sustained PRGF lending is dependent on the timing of the initiation of such operations and the assumed rate of return on the Reserve Account balance.
15. An annual commitment capacity of SDR 660 million under the self-sustained PRGF is low relative to the recent past, and, in light of the intensified global effort towards the achievement of the Millennium Development Goals, might be viewed as inadequate in the period after 2005. Staff has begun to examine options for maintaining the annual commitment capacity of the PRGF at around the historical average of SDR 1 billion in the context of the broader review of the role of the Fund in low-income countries over the medium to long term. A staff paper on this issue is currently planned for consideration by the Executive Board later this year.
IV. Resources Needed for Protracted Arrears Cases
16. With prospects for an end to the civil conflict in Sudan better than at any time in the past twenty years, the mobilization of resources for arrears clearance and HIPC Initiative assistance for Sudan becomes a matter of urgency. In the funding of the PRGF and PRGF-HIPC Trusts, no allowance was made for the loan, subsidy, and HIPC grant resources that would be needed for Liberia, Somalia, and Sudan, which have been in arrears to the Fund since the mid-1980s. However, for Sudan, arrears clearance and debt relief would be a high priority in the immediate aftermath of the signing of a peace agreement that could take place in the coming months.
17. Based on an updated debt sustainability analysis, the estimated cost to the Fund in terms of subsidy and grant resources for clearing sudan’s arrears and providing HIPC Initiative assistance would amount to about SDR 0.9 billion. In addition, PRGF loan resources would also need to be raised for financing a successor financial arrangement from the Fund following arrears clearance. The clearance of arrears to the Fund would need to be part of a comprehensive effort by the international community to restore Sudan’s external viability. Exceptionally deep debt relief from bilateral creditors, both in and outside the Paris Club, would be at the core of this effort along with the normalization of relations with the Fund. Before committing to a schedule for arrears clearance and debt relief under the HIPC Initiative, the Fund would need to receive firm pledges from bilateral contributors of the resources needed, as well as financing assurances from creditors and donors to participate in arrears clearance and the HIPC Initiative.
18. At some stage, eventual arrears clearance and debt relief under the HIPC Initiative for Liberia and Somalia would also require substantial resource mobilization.
Preliminary estimates suggest that subsidy and grant resources of about SDR 400 million would need to be mobilized for Liberia and another SDR 200 million for Somalia. Staff will return to these issues as developments warrant.
V. Subsidization of Post-Conflict Emergency Assistance
19. Contributions to the subsidization of post-conflict emergency assistance are estimated to be adequate through at least end-2004. In May 2001, an administered account was established to subsidize the rate of charge on post-conflict emergency assistance to PRGF-eligible countries to 0.5 percent per year. At end-July 2003, total pledged contributions to this account from seven countries stood at SDR 11.6 million, compared to an estimated need for subsidies of SDR 7-12 million through 2004, unchanged from the last update (Table 5). Subsidy grants of SDR 0.1 million have been disbursed to Burundi, the Republic of Congo, Guinea-Bissau, and Tajikistan since the last update. Thus far, of the total contributions pledged, SDR 7.9 million has been received from bilateral donors, and subsidy grants of SDR 1.5 million have been disbursed to seven members.14
Subsidy Contributions for Post-Conflict Emergency Assistance
(In millions; as of end-July 2003)
Subsidy Contributions for Post-Conflict Emergency Assistance
(In millions; as of end-July 2003)
| Contributor | Contribution pledged | SDR equivalent | Contribution received | Subsidy disbursed |
|---|---|---|---|---|
| Belgium | SDR 1.0 | 1.0 | 0.6 | 0.1 |
| Canada | Can$ 3.25 | 1.6 | 0.4 | -- |
| Netherlands | US$ 2.0 | 1.5 | 1.5 | -- |
| Norway | SDR 3.0 | 3.0 | 1.0 | -- |
| Sweden | SDR 0.8 | 0.8 | 0.8 | 0.8 |
| Switzerland | US$ 1.0 | 0.8 | 0.8 | -- |
| United Kingdom | £ 2.5 | 2.9 | 2.9 | 0.7 |
| Total | 11.6 | 7.9 | 1.5 |
Subsidy Contributions for Post-Conflict Emergency Assistance
(In millions; as of end-July 2003)
| Contributor | Contribution pledged | SDR equivalent | Contribution received | Subsidy disbursed |
|---|---|---|---|---|
| Belgium | SDR 1.0 | 1.0 | 0.6 | 0.1 |
| Canada | Can$ 3.25 | 1.6 | 0.4 | -- |
| Netherlands | US$ 2.0 | 1.5 | 1.5 | -- |
| Norway | SDR 3.0 | 3.0 | 1.0 | -- |
| Sweden | SDR 0.8 | 0.8 | 0.8 | 0.8 |
| Switzerland | US$ 1.0 | 0.8 | 0.8 | -- |
| United Kingdom | £ 2.5 | 2.9 | 2.9 | 0.7 |
| Total | 11.6 | 7.9 | 1.5 |
VI. Proposed Decision
20. The following draft decision, which can be adopted by a majority of the votes cast, is proposed for adoption by the Executive Board:
Pursuant to Decision No. 10286-(93/23) ESAF, adopted on February 22, 1993, as amended, the Fund has reviewed the adequacy of balances in the Reserve Account of the PRGF Trust, and determines that they are sufficient to meet all obligations that could give rise to payments from the Account to lenders to the Loan Account of the PRGF Trust in the six months from October 1, 2003 to March 31, 2004.
RGF Trust—Subsidy Agreements 1/
(In millions of SDRs, unless otherwise noted; as of end-June 2003)
Subsidy contributions to the PRGF Trust result from the difference between the investment income on contributions and the below market rate of interest paid to contributors. Excludes contribution by Spain that will coincide with the repayment installments of the PRGF Trust loan from the Government of Spain.
Equivalent of US$10 million (at the exchange rate of June 29, 1994).
Interest rate paid is equivalent to the return on investment by the Fund on this deposit (net of any costs), less 2.0 percent per annum. If the interest rate obtained is less than 2.0 per annum, the deposit shall bear zero interest.
All the deposits will be repaid together at the end of ten years after the date of the first deposit.
All the deposits will be repaid together at the end of sixteen years after the date of the first deposit.
In January 1998, the Bank of Thailand requested and obtained the immediate encashment of the two investments totaling SDR 60 million.
Equivalent of US$5 million (at the exchange rate of May 11, 1994).
Interest rate paid is equivalent to the return on this investment by the Fund (net of any costs), less 2.6 percent per annum. If the interest rate obtained by the Fund is 2.6 percent per annum or less, the investment shall bear zero interest.
RGF Trust—Subsidy Agreements 1/
(In millions of SDRs, unless otherwise noted; as of end-June 2003)
| Effective date of agreement | Vehicle | Deposit/Investment Amount | Interest Rate (percent) | Maturity (years) | |||
|---|---|---|---|---|---|---|---|
| Approved | Received | Outstanding | |||||
| Austria | |||||||
| Austrian National Bank | Jun. 8, 1988 | Admin. Account | 60.0 | 60.0 | -- | 0.5 | 5½-10 |
| Austrian National Bank | Apr. 19, 1994 | Admin. Account | 50.0 | 50.0 | 25.0 | 0.5 | 5½-10 |
| Belgium | |||||||
| National Bank of Belgium | Jun. 30, 1989 | Admin. Account | 100.0 | 100.0 | -- | 0.5 | 10 |
| National Bank of Belgium | Apr. 21, 1994 | Admin. Account | 80.0 | 80.0 | 80.0 | 0.5 | 10 |
| Botswana | |||||||
| Bank of Botswana 2/ | Jun. 30, 1994 | Admin. Account | 6.9 | 6.9 | 6.9 | 2.0 | 10 |
| Chile | |||||||
| Banco Central de Chile | Aug. 24, 1994 | Admin. Account | 15.0 | 15.0 | -- | 0.5 | 5 |
| Greece | |||||||
| Bank of Greece | Nov. 30, 1988 | Admin. Account | 35.0 | 35.0 | -- | 0.5 | 5½-10 |
| Bank of Greece | Apr. 22, 1994 | Admin. Account | 35.0 | 35.0 | 7.0 | 0.5 | 5½-10 |
| Indonesia | |||||||
| Bank Indonesia 3/ | Jun. 23, 1994 | Admin. Account | 25.0 | 25.0 | 25.0 | -- | 10 |
| Iran, Islamic Republic of | |||||||
| Central Bank of Iran 4/ | May 24, 1994 | Admin. Account | 5.0 | 5.0 | 5.0 | 0.5 | 10 |
| Malaysia | |||||||
| Bank Negara Malaysia | May 17, 1988 | Subsidy Account | 40.0 | 40.0 | -- | 0.5 | 10 |
| Bank Negara Malaysia | Jun. 30, 1994 | Subsidy Account | 40.0 | 40.0 | 40.0 | 2.0 | 10 |
| Malta | |||||||
| Central Bank of Malta | Dec. 13, 1989 | Subsidy Account | 1.4 | 1.4 | -- | 0.5 | 13 |
| Central Bank of Malta | May 27, 1994 | Subsidy Account | 1.4 | 1.4 | 1.4 | 0.5 | 13 |
| Pakistan | |||||||
| State Bank of Pakistan 5/ | Apr. 21, 1994 | Subsidy Account | 10.0 | 6.0 | 6.7 | 0.5 | 16 |
| Portugal | |||||||
| Banco do Portugal | May 5, 1994 | Admin. Account | 13.1 | 13.1 | 8.8 | 0.5 | 6-10 |
| Singapore | |||||||
| Monetary Authority of Singapore | Nov. 4, 1988 | Subsidy Account | 40.0 | 40.0 | -- | 2.0 | 10 |
| Monetary Authority of Singapore | May 20, 1994 | Subsidy Account | 40.0 | 40.0 | 40.0 | 2.0 | 10 |
| Thailand | |||||||
| Bank of Thailand 6/ | Jun. 14, 1988 | Subsidy Account | 20.0 | 20.0 | -- | 2.0 | 10 |
| Bank of Thailand 6/ | Apr. 22, 1994 | Subsidy Account | 40.0 | 40.0 | -- | 2.0 | 10 |
| Tunisia | |||||||
| Banque Centrale de Tunisie 7/ | May 4, 1994 | Subsidy Account | 3.6 | 3.6 | 3.6 | 0.5 | 10 |
| Uruguay | |||||||
| Banco Central del Uruguay 8/ | Jul. 7, 1994 | Subsidy Account | 7.2 | 7.2 | 7.2 | -- | 10 |
| Total | -- | -- | 668.5 | 664.5 | 256.4 | -- | -- |
Subsidy contributions to the PRGF Trust result from the difference between the investment income on contributions and the below market rate of interest paid to contributors. Excludes contribution by Spain that will coincide with the repayment installments of the PRGF Trust loan from the Government of Spain.
Equivalent of US$10 million (at the exchange rate of June 29, 1994).
Interest rate paid is equivalent to the return on investment by the Fund on this deposit (net of any costs), less 2.0 percent per annum. If the interest rate obtained is less than 2.0 per annum, the deposit shall bear zero interest.
All the deposits will be repaid together at the end of ten years after the date of the first deposit.
All the deposits will be repaid together at the end of sixteen years after the date of the first deposit.
In January 1998, the Bank of Thailand requested and obtained the immediate encashment of the two investments totaling SDR 60 million.
Equivalent of US$5 million (at the exchange rate of May 11, 1994).
Interest rate paid is equivalent to the return on this investment by the Fund (net of any costs), less 2.6 percent per annum. If the interest rate obtained by the Fund is 2.6 percent per annum or less, the investment shall bear zero interest.
RGF Trust—Subsidy Agreements 1/
(In millions of SDRs, unless otherwise noted; as of end-June 2003)
| Effective date of agreement | Vehicle | Deposit/Investment Amount | Interest Rate (percent) | Maturity (years) | |||
|---|---|---|---|---|---|---|---|
| Approved | Received | Outstanding | |||||
| Austria | |||||||
| Austrian National Bank | Jun. 8, 1988 | Admin. Account | 60.0 | 60.0 | -- | 0.5 | 5½-10 |
| Austrian National Bank | Apr. 19, 1994 | Admin. Account | 50.0 | 50.0 | 25.0 | 0.5 | 5½-10 |
| Belgium | |||||||
| National Bank of Belgium | Jun. 30, 1989 | Admin. Account | 100.0 | 100.0 | -- | 0.5 | 10 |
| National Bank of Belgium | Apr. 21, 1994 | Admin. Account | 80.0 | 80.0 | 80.0 | 0.5 | 10 |
| Botswana | |||||||
| Bank of Botswana 2/ | Jun. 30, 1994 | Admin. Account | 6.9 | 6.9 | 6.9 | 2.0 | 10 |
| Chile | |||||||
| Banco Central de Chile | Aug. 24, 1994 | Admin. Account | 15.0 | 15.0 | -- | 0.5 | 5 |
| Greece | |||||||
| Bank of Greece | Nov. 30, 1988 | Admin. Account | 35.0 | 35.0 | -- | 0.5 | 5½-10 |
| Bank of Greece | Apr. 22, 1994 | Admin. Account | 35.0 | 35.0 | 7.0 | 0.5 | 5½-10 |
| Indonesia | |||||||
| Bank Indonesia 3/ | Jun. 23, 1994 | Admin. Account | 25.0 | 25.0 | 25.0 | -- | 10 |
| Iran, Islamic Republic of | |||||||
| Central Bank of Iran 4/ | May 24, 1994 | Admin. Account | 5.0 | 5.0 | 5.0 | 0.5 | 10 |
| Malaysia | |||||||
| Bank Negara Malaysia | May 17, 1988 | Subsidy Account | 40.0 | 40.0 | -- | 0.5 | 10 |
| Bank Negara Malaysia | Jun. 30, 1994 | Subsidy Account | 40.0 | 40.0 | 40.0 | 2.0 | 10 |
| Malta | |||||||
| Central Bank of Malta | Dec. 13, 1989 | Subsidy Account | 1.4 | 1.4 | -- | 0.5 | 13 |
| Central Bank of Malta | May 27, 1994 | Subsidy Account | 1.4 | 1.4 | 1.4 | 0.5 | 13 |
| Pakistan | |||||||
| State Bank of Pakistan 5/ | Apr. 21, 1994 | Subsidy Account | 10.0 | 6.0 | 6.7 | 0.5 | 16 |
| Portugal | |||||||
| Banco do Portugal | May 5, 1994 | Admin. Account | 13.1 | 13.1 | 8.8 | 0.5 | 6-10 |
| Singapore | |||||||
| Monetary Authority of Singapore | Nov. 4, 1988 | Subsidy Account | 40.0 | 40.0 | -- | 2.0 | 10 |
| Monetary Authority of Singapore | May 20, 1994 | Subsidy Account | 40.0 | 40.0 | 40.0 | 2.0 | 10 |
| Thailand | |||||||
| Bank of Thailand 6/ | Jun. 14, 1988 | Subsidy Account | 20.0 | 20.0 | -- | 2.0 | 10 |
| Bank of Thailand 6/ | Apr. 22, 1994 | Subsidy Account | 40.0 | 40.0 | -- | 2.0 | 10 |
| Tunisia | |||||||
| Banque Centrale de Tunisie 7/ | May 4, 1994 | Subsidy Account | 3.6 | 3.6 | 3.6 | 0.5 | 10 |
| Uruguay | |||||||
| Banco Central del Uruguay 8/ | Jul. 7, 1994 | Subsidy Account | 7.2 | 7.2 | 7.2 | -- | 10 |
| Total | -- | -- | 668.5 | 664.5 | 256.4 | -- | -- |
Subsidy contributions to the PRGF Trust result from the difference between the investment income on contributions and the below market rate of interest paid to contributors. Excludes contribution by Spain that will coincide with the repayment installments of the PRGF Trust loan from the Government of Spain.
Equivalent of US$10 million (at the exchange rate of June 29, 1994).
Interest rate paid is equivalent to the return on investment by the Fund on this deposit (net of any costs), less 2.0 percent per annum. If the interest rate obtained is less than 2.0 per annum, the deposit shall bear zero interest.
All the deposits will be repaid together at the end of ten years after the date of the first deposit.
All the deposits will be repaid together at the end of sixteen years after the date of the first deposit.
In January 1998, the Bank of Thailand requested and obtained the immediate encashment of the two investments totaling SDR 60 million.
Equivalent of US$5 million (at the exchange rate of May 11, 1994).
Interest rate paid is equivalent to the return on this investment by the Fund (net of any costs), less 2.6 percent per annum. If the interest rate obtained by the Fund is 2.6 percent per annum or less, the investment shall bear zero interest.
PRGF Trust—Loan Agreements
(In millions of SDRs; as of end-June 2003)
Including additional loan commitments for interim PRGF operations.
Before April 17, 1998, known as Caisse Française de Développement.
In late 1999, the Bank of Italy replaced the Ufficio Italiano dei Cambi as lender to the PRGF Trust.
On October 1, 1999 the Export-Import Bank of Japan merged with the Overseas Economic Cooperation Fund and became the Japan Bank for International Cooperation.
The loan commitment is for the SDR equivalent of US$50 million.
The original loan commitment of the Bank of Spain was SDR 220 million; however, only SDR 216.4 million was drawn and disbursed by the expiration date for drawings.
The full loan commitment of SDR 200 million was drawn in January 1989; this amount was fully disbursed to borrowers by March 1994.
On August 26, 1998, the SFD indicated that it did not intend to make further loans in association with the PRGF.
Any mismatch of outstanding resources between the amount owed by PRGF borrowers and the amount owed to PRGF lenders arises because of mismatches in timing between drawdowns from lenders to the Trust and disbursements of PRGF loans to borrowers.
PRGF Trust—Loan Agreements
(In millions of SDRs; as of end-June 2003)
| Effective date of agreement | Expiration date for drawings | Loan commitment | Amount Disbursed | Amount outstanding | ||
|---|---|---|---|---|---|---|
| Amount | In percent of commitment | |||||
| Belgium | ||||||
| National Bank of Belgium 1/ | Jul. 2, 1999 | Dec. 31, 2009 | 350.0 | 212.0 | 60.6 | 212.0 |
| Canada | ||||||
| Government of Canada | Feb. 22, 1989 | Dec. 31, 1997 | 300.0 | 300.0 | 100.0 | 105.1 |
| Government of Canada | May 9, 1995 | Dec. 31, 2005 | 400.0 | 328.8 | 82.2 | 321.4 |
| China | ||||||
| Government of China 1/ | Jul. 05, 1994 | Dec. 31, 2009 | 200.0 | 143.5 | 71.8 | 140.9 |
| Denmark | ||||||
| National Bank of Denmark | May 3, 2000 | Dec. 31, 2003 | 100.0 | 100.0 | 100.0 | 100.0 |
| Egypt | ||||||
| Central Bank of Egypt 1/ | Jun. 13, 1994 | Dec. 31, 2009 | 155.6 | 100.0 | 64.3 | 97.2 |
| France | ||||||
| Agence Française de Développement 2/ | Apr. 05, 1988 | Dec. 31, 1997 | 800.0 | 800.0 | 100.0 | 181.6 |
| Agence Française de Développement 2/ | Jan. 03, 1995 | Dec. 31, 2005 | 750.0 | 750.0 | 100.0 | 737.2 |
| Agence Française de Développement 1/ 2/ | Dec. 17, 1999 | Dec. 31, 2009 | 1,350.0 | 17.7 | 1.3 | 17.7 |
| Germany | ||||||
| Kreditanstalt für Wiederaufbau | Mar. 31, 1989 | Dec. 31, 1997 | 700.0 | 700.0 | 100.0 | 211.7 |
| Kreditanstalt für Wiederaufbau | May 17, 1995 | Dec. 31, 2005 | 700.0 | 700.0 | 100.0 | 697.0 |
| Kreditanstalt für Wiederaufbau 1/ | Jun. 19, 2000 | Dec. 31, 2009 | 1,350.0 | 133.6 | 9.9 | 133.6 |
| Italy | ||||||
| Bank of Italy 3/ | Oct. 04, 1990 | Dec. 31, 1997 | 370.0 | 370.0 | 100.0 | 121.4 |
| Bank of Italy 3/ | May. 29, 1998 | Dec. 31, 2005 | 210.0 | 210.0 | 100.0 | 210.0 |
| Bank of Italy 1/ | Mar. 1, 2000 | Dec. 31, 2009 | 800.0 | 319.9 | 40.0 | 319.9 |
| Japan | ||||||
| Japan Bank for International Cooperation 4/ | Apr. 12, 1988 | Dec. 31, 1997 | 2,200.0 | 2,200.0 | 100.0 | 753.1 |
| Japan Bank for International Cooperation 1/ 4/ | Oct. 05, 1994 | Dec. 31, 2009 | 2,934.8 | 1,747.7 | 59.5 | 1,726.0 |
| Korea | ||||||
| Bank of Korea | Apr. 20 1989 | Dec. 31, 1997 | 65.0 | 65.0 | 100.0 | 12.3 |
| Bank of Korea | Jun. 20, 1994 | Dec. 31, 2005 | 27.7 | 27.7 | 100.0 | 26.8 |
| Netherlands | ||||||
| Bank of the Netherlands 1/ | Sep. 29, 1999 | Dec. 31, 2009 | 450.0 | 118.0 | 26.2 | 118.0 |
| Norway | ||||||
| Bank of Norway | Apr. 14, 1988 | Dec. 31, 1997 | 90.0 | 90.0 | 100.0 | 21.8 |
| Bank of Norway | Jun. 16, 1994 | Dec. 31, 2005 | 60.0 | 60.0 | 100.0 | 58.7 |
| OPEC Fund for International Development 5/ | Dec. 20, 1994 | Dec. 31, 2005 | 37.0 | 37.0 | 100.0 | 37.0 |
| Spain | ||||||
| Bank of Spain 6/ | Jun. 20, 1988 | Jun. 30, 1993 | 216.4 | 216.4 | 100.0 | -- |
| Government of Spain | Feb. 08, 1995 | Dec. 31, 2005 | 67.0 | 67.0 | 100.0 | 65.5 |
| Bank of Spain 1/ | Feb. 14, 2000 | Dec. 31, 2009 | 425.0 | 41.4 | 9.7 | 42.9 |
| Switzerland | ||||||
| Swiss Confederation 7/ | Dec. 23, 1988 | Dec. 31, 1997 | 200.0 | 200.0 | 100.0 | -- |
| Swiss National Bank 1/ | Jun. 22, 1995 | Dec. 31, 2009 | 401.7 | 169.3 | 42.2 | 159.4 |
| Subtotal | -- | -- | 15,710.2 | 10,225.1 | 65.1 | 6,628.3 |
| Associated Agreement - | ||||||
| Saudi Fund for Development (SFD) | Feb. 27, 1989 | --- 8/ | 49.5 | 49.5 | 100.0 | 9.0 |
| Total Loan and Associated Loan Agreements 9/ | -- | -- | 15,759.7 | 10,274.6 | 65.2 | 6,637.3 |
Including additional loan commitments for interim PRGF operations.
Before April 17, 1998, known as Caisse Française de Développement.
In late 1999, the Bank of Italy replaced the Ufficio Italiano dei Cambi as lender to the PRGF Trust.
On October 1, 1999 the Export-Import Bank of Japan merged with the Overseas Economic Cooperation Fund and became the Japan Bank for International Cooperation.
The loan commitment is for the SDR equivalent of US$50 million.
The original loan commitment of the Bank of Spain was SDR 220 million; however, only SDR 216.4 million was drawn and disbursed by the expiration date for drawings.
The full loan commitment of SDR 200 million was drawn in January 1989; this amount was fully disbursed to borrowers by March 1994.
On August 26, 1998, the SFD indicated that it did not intend to make further loans in association with the PRGF.
Any mismatch of outstanding resources between the amount owed by PRGF borrowers and the amount owed to PRGF lenders arises because of mismatches in timing between drawdowns from lenders to the Trust and disbursements of PRGF loans to borrowers.
PRGF Trust—Loan Agreements
(In millions of SDRs; as of end-June 2003)
| Effective date of agreement | Expiration date for drawings | Loan commitment | Amount Disbursed | Amount outstanding | ||
|---|---|---|---|---|---|---|
| Amount | In percent of commitment | |||||
| Belgium | ||||||
| National Bank of Belgium 1/ | Jul. 2, 1999 | Dec. 31, 2009 | 350.0 | 212.0 | 60.6 | 212.0 |
| Canada | ||||||
| Government of Canada | Feb. 22, 1989 | Dec. 31, 1997 | 300.0 | 300.0 | 100.0 | 105.1 |
| Government of Canada | May 9, 1995 | Dec. 31, 2005 | 400.0 | 328.8 | 82.2 | 321.4 |
| China | ||||||
| Government of China 1/ | Jul. 05, 1994 | Dec. 31, 2009 | 200.0 | 143.5 | 71.8 | 140.9 |
| Denmark | ||||||
| National Bank of Denmark | May 3, 2000 | Dec. 31, 2003 | 100.0 | 100.0 | 100.0 | 100.0 |
| Egypt | ||||||
| Central Bank of Egypt 1/ | Jun. 13, 1994 | Dec. 31, 2009 | 155.6 | 100.0 | 64.3 | 97.2 |
| France | ||||||
| Agence Française de Développement 2/ | Apr. 05, 1988 | Dec. 31, 1997 | 800.0 | 800.0 | 100.0 | 181.6 |
| Agence Française de Développement 2/ | Jan. 03, 1995 | Dec. 31, 2005 | 750.0 | 750.0 | 100.0 | 737.2 |
| Agence Française de Développement 1/ 2/ | Dec. 17, 1999 | Dec. 31, 2009 | 1,350.0 | 17.7 | 1.3 | 17.7 |
| Germany | ||||||
| Kreditanstalt für Wiederaufbau | Mar. 31, 1989 | Dec. 31, 1997 | 700.0 | 700.0 | 100.0 | 211.7 |
| Kreditanstalt für Wiederaufbau | May 17, 1995 | Dec. 31, 2005 | 700.0 | 700.0 | 100.0 | 697.0 |
| Kreditanstalt für Wiederaufbau 1/ | Jun. 19, 2000 | Dec. 31, 2009 | 1,350.0 | 133.6 | 9.9 | 133.6 |
| Italy | ||||||
| Bank of Italy 3/ | Oct. 04, 1990 | Dec. 31, 1997 | 370.0 | 370.0 | 100.0 | 121.4 |
| Bank of Italy 3/ | May. 29, 1998 | Dec. 31, 2005 | 210.0 | 210.0 | 100.0 | 210.0 |
| Bank of Italy 1/ | Mar. 1, 2000 | Dec. 31, 2009 | 800.0 | 319.9 | 40.0 | 319.9 |
| Japan | ||||||
| Japan Bank for International Cooperation 4/ | Apr. 12, 1988 | Dec. 31, 1997 | 2,200.0 | 2,200.0 | 100.0 | 753.1 |
| Japan Bank for International Cooperation 1/ 4/ | Oct. 05, 1994 | Dec. 31, 2009 | 2,934.8 | 1,747.7 | 59.5 | 1,726.0 |
| Korea | ||||||
| Bank of Korea | Apr. 20 1989 | Dec. 31, 1997 | 65.0 | 65.0 | 100.0 | 12.3 |
| Bank of Korea | Jun. 20, 1994 | Dec. 31, 2005 | 27.7 | 27.7 | 100.0 | 26.8 |
| Netherlands | ||||||
| Bank of the Netherlands 1/ | Sep. 29, 1999 | Dec. 31, 2009 | 450.0 | 118.0 | 26.2 | 118.0 |
| Norway | ||||||
| Bank of Norway | Apr. 14, 1988 | Dec. 31, 1997 | 90.0 | 90.0 | 100.0 | 21.8 |
| Bank of Norway | Jun. 16, 1994 | Dec. 31, 2005 | 60.0 | 60.0 | 100.0 | 58.7 |
| OPEC Fund for International Development 5/ | Dec. 20, 1994 | Dec. 31, 2005 | 37.0 | 37.0 | 100.0 | 37.0 |
| Spain | ||||||
| Bank of Spain 6/ | Jun. 20, 1988 | Jun. 30, 1993 | 216.4 | 216.4 | 100.0 | -- |
| Government of Spain | Feb. 08, 1995 | Dec. 31, 2005 | 67.0 | 67.0 | 100.0 | 65.5 |
| Bank of Spain 1/ | Feb. 14, 2000 | Dec. 31, 2009 | 425.0 | 41.4 | 9.7 | 42.9 |
| Switzerland | ||||||
| Swiss Confederation 7/ | Dec. 23, 1988 | Dec. 31, 1997 | 200.0 | 200.0 | 100.0 | -- |
| Swiss National Bank 1/ | Jun. 22, 1995 | Dec. 31, 2009 | 401.7 | 169.3 | 42.2 | 159.4 |
| Subtotal | -- | -- | 15,710.2 | 10,225.1 | 65.1 | 6,628.3 |
| Associated Agreement - | ||||||
| Saudi Fund for Development (SFD) | Feb. 27, 1989 | --- 8/ | 49.5 | 49.5 | 100.0 | 9.0 |
| Total Loan and Associated Loan Agreements 9/ | -- | -- | 15,759.7 | 10,274.6 | 65.2 | 6,637.3 |
Including additional loan commitments for interim PRGF operations.
Before April 17, 1998, known as Caisse Française de Développement.
In late 1999, the Bank of Italy replaced the Ufficio Italiano dei Cambi as lender to the PRGF Trust.
On October 1, 1999 the Export-Import Bank of Japan merged with the Overseas Economic Cooperation Fund and became the Japan Bank for International Cooperation.
The loan commitment is for the SDR equivalent of US$50 million.
The original loan commitment of the Bank of Spain was SDR 220 million; however, only SDR 216.4 million was drawn and disbursed by the expiration date for drawings.
The full loan commitment of SDR 200 million was drawn in January 1989; this amount was fully disbursed to borrowers by March 1994.
On August 26, 1998, the SFD indicated that it did not intend to make further loans in association with the PRGF.
Any mismatch of outstanding resources between the amount owed by PRGF borrowers and the amount owed to PRGF lenders arises because of mismatches in timing between drawdowns from lenders to the Trust and disbursements of PRGF loans to borrowers.
PRGF Trust—Reserve Account Coverage 1/
(In millions of SDRs)
Projections exclude the impact of the projected initiation of self-sustained PRGF operations in 2006.
Excludes associated loans from the Saudi Fund for Development (SFD), the risk of which is borne by the SFD. Current overdue Trust Fund obligations (SDR 117 million), overdue SAF obligations (SDR 10 million), and overdue PRGF obligations (SDR 68 million) are assumed to be paid in 2005.
PRGF Trust—Reserve Account Coverage 1/
(In millions of SDRs)
| Reserve Account cumulative balance (end of period) | PRGF Trust obligations 2/ (end of period) | Annual loan repayments to lenders 2/ | ||
|---|---|---|---|---|
| 1. Actual | ||||
| 1988 | 169 | 103 | -- | |
| 1989 | 272 | 510 | -- | |
| 1990 | 395 | 795 | -- | |
| 1991 | 513 | 1,320 | -- | |
| 1992 | 630 | 1,786 | -- | |
| 1993 | 793 | 2,005 | -- | |
| 1994 | 1,009 | 2,786 | 33 | |
| 1995 | 1,336 | 3,919 | 114 | |
| 1996 | 1,716 | 4,446 | 181 | |
| 1997 | 2,093 | 4,892 | 285 | |
| 1998 | 2,345 | 5,421 | 366 | |
| 1999 | 2,548 | 5,820 | 412 | |
| 2000 | 2,714 | 5,773 | 475 | |
| 2001 | 2,917 | 5,971 | 665 | |
| 2002 | 3,079 | 6,636 | 696 | |
| 2. Projected | ||||
| 2003 | 3,152 | 7,110 | 781 | |
| 2004 | 3,433 | 7,566 | 877 | |
| 2005 | 3,733 | 8,302 | 853 | |
| 2006 | 3,922 | 8,379 | 710 | |
| 2007 | 4,120 | 8,118 | 818 | |
| 2008 | 4,329 | 7,478 | 901 | |
| 2009 | 4,548 | 6,574 | 969 | |
| 2010 | 4,778 | 5,447 | 1,128 | |
| 2011 | 5,020 | 4,154 | 1,293 | |
| 2012 | 5,274 | 2,955 | 1,199 | |
| 2013 | 5,541 | 1,912 | 1,042 | |
| 2014 | 5,822 | 1,067 | 845 | |
| 2015 | 6,117 | 495 | 572 | |
| 2016 | 6,426 | 202 | 293 | |
| 2017 | 6,752 | 59 | 143 | |
| 2018 | 7,093 | 7 | 52 | |
| 2019 | 7,452 | 0 | 7 | |
| 2020 | 7,830 | 0 | 0 | |
| Total (including interim PRGF) | 15,710 | |||
| Memorandum items: | ||||
| Associated Loan Agreement with the Saudi Fund for Development (SFD) | 49.5 | |||
| Total, including SFD | 15,759 | |||
Projections exclude the impact of the projected initiation of self-sustained PRGF operations in 2006.
Excludes associated loans from the Saudi Fund for Development (SFD), the risk of which is borne by the SFD. Current overdue Trust Fund obligations (SDR 117 million), overdue SAF obligations (SDR 10 million), and overdue PRGF obligations (SDR 68 million) are assumed to be paid in 2005.
PRGF Trust—Reserve Account Coverage 1/
(In millions of SDRs)
| Reserve Account cumulative balance (end of period) | PRGF Trust obligations 2/ (end of period) | Annual loan repayments to lenders 2/ | ||
|---|---|---|---|---|
| 1. Actual | ||||
| 1988 | 169 | 103 | -- | |
| 1989 | 272 | 510 | -- | |
| 1990 | 395 | 795 | -- | |
| 1991 | 513 | 1,320 | -- | |
| 1992 | 630 | 1,786 | -- | |
| 1993 | 793 | 2,005 | -- | |
| 1994 | 1,009 | 2,786 | 33 | |
| 1995 | 1,336 | 3,919 | 114 | |
| 1996 | 1,716 | 4,446 | 181 | |
| 1997 | 2,093 | 4,892 | 285 | |
| 1998 | 2,345 | 5,421 | 366 | |
| 1999 | 2,548 | 5,820 | 412 | |
| 2000 | 2,714 | 5,773 | 475 | |
| 2001 | 2,917 | 5,971 | 665 | |
| 2002 | 3,079 | 6,636 | 696 | |
| 2. Projected | ||||
| 2003 | 3,152 | 7,110 | 781 | |
| 2004 | 3,433 | 7,566 | 877 | |
| 2005 | 3,733 | 8,302 | 853 | |
| 2006 | 3,922 | 8,379 | 710 | |
| 2007 | 4,120 | 8,118 | 818 | |
| 2008 | 4,329 | 7,478 | 901 | |
| 2009 | 4,548 | 6,574 | 969 | |
| 2010 | 4,778 | 5,447 | 1,128 | |
| 2011 | 5,020 | 4,154 | 1,293 | |
| 2012 | 5,274 | 2,955 | 1,199 | |
| 2013 | 5,541 | 1,912 | 1,042 | |
| 2014 | 5,822 | 1,067 | 845 | |
| 2015 | 6,117 | 495 | 572 | |
| 2016 | 6,426 | 202 | 293 | |
| 2017 | 6,752 | 59 | 143 | |
| 2018 | 7,093 | 7 | 52 | |
| 2019 | 7,452 | 0 | 7 | |
| 2020 | 7,830 | 0 | 0 | |
| Total (including interim PRGF) | 15,710 | |||
| Memorandum items: | ||||
| Associated Loan Agreement with the Saudi Fund for Development (SFD) | 49.5 | |||
| Total, including SFD | 15,759 | |||
Projections exclude the impact of the projected initiation of self-sustained PRGF operations in 2006.
Excludes associated loans from the Saudi Fund for Development (SFD), the risk of which is borne by the SFD. Current overdue Trust Fund obligations (SDR 117 million), overdue SAF obligations (SDR 10 million), and overdue PRGF obligations (SDR 68 million) are assumed to be paid in 2005.
Information on Pending Bilateral Contributions to the PRGF-HIPC Trust Status as of end-August 20031
Reflects pledged contributions which are not yet effective. Post-SCA-2 amounts shown include refunds of SCA-2 resources and accumulated interest income.
Information on Pending Bilateral Contributions to the PRGF-HIPC Trust Status as of end-August 20031
| Argentina: | The remaining balance of SDR 6.4 million (as needed) of its pledged contribution to be financed from its Post-SCA-2 balance of SDR 5.5 million. |
| Bahrain: | Contribution of income on an interest-free deposit through 2018. |
| Dominican Republic: | Contribution of net income on a deposit through 2018 to be financed from its Post-SCA-2 balance of SDR 1.0 million at 1 percent per annum. |
| Gabon: | The remaining balance of SDR 1.9 million (as needed) of its pledged contribution to be financed by grants. |
| Grenada: | Contribution of net income on a deposit for 10 years of SDR 0.20 million at 0.5 percent per annum. |
| Lebanon: | Contribution of income on an interest-free deposit through 2018. |
| Maldives: | Contribution of income on an interest-free deposit through 2018. |
| Mauritius: | The authorities are considering an additional contribution. |
| Trinidad and Tobago: | Contribution of income on an interest-free deposit of its Post-SCA-2 balance of SDR 2.5 million. |
| Vanuatu: | Grant contribution of its Post-SCA-2 balance of SDR 0.05 million. |
| República Bolivariana de Venezuela: | Prepared to contribute based on its quota-based share. Contribution could be partially financed through use of its Post-SCA-2 balance of SDR 30.0 million. |
Reflects pledged contributions which are not yet effective. Post-SCA-2 amounts shown include refunds of SCA-2 resources and accumulated interest income.
Information on Pending Bilateral Contributions to the PRGF-HIPC Trust Status as of end-August 20031
| Argentina: | The remaining balance of SDR 6.4 million (as needed) of its pledged contribution to be financed from its Post-SCA-2 balance of SDR 5.5 million. |
| Bahrain: | Contribution of income on an interest-free deposit through 2018. |
| Dominican Republic: | Contribution of net income on a deposit through 2018 to be financed from its Post-SCA-2 balance of SDR 1.0 million at 1 percent per annum. |
| Gabon: | The remaining balance of SDR 1.9 million (as needed) of its pledged contribution to be financed by grants. |
| Grenada: | Contribution of net income on a deposit for 10 years of SDR 0.20 million at 0.5 percent per annum. |
| Lebanon: | Contribution of income on an interest-free deposit through 2018. |
| Maldives: | Contribution of income on an interest-free deposit through 2018. |
| Mauritius: | The authorities are considering an additional contribution. |
| Trinidad and Tobago: | Contribution of income on an interest-free deposit of its Post-SCA-2 balance of SDR 2.5 million. |
| Vanuatu: | Grant contribution of its Post-SCA-2 balance of SDR 0.05 million. |
| República Bolivariana de Venezuela: | Prepared to contribute based on its quota-based share. Contribution could be partially financed through use of its Post-SCA-2 balance of SDR 30.0 million. |
Reflects pledged contributions which are not yet effective. Post-SCA-2 amounts shown include refunds of SCA-2 resources and accumulated interest income.
The Executive Board is required to review the adequacy of the Reserve Account of the PRGF Trust every six months as long as PRGF loans related to the encashment of rights under rights accumulation programs remain outstanding (Decision No. 10286-(93/23) ESAF, February 22, 1993, as amended). Such loans remain outstanding to Sierra Leone and Zambia.
Alternative methodologies on topping-up assistance estimates are discussed in detail in Enhanced HIPC Initiative—Considerations Regarding the Calculation of Additional Debt Relief at the Completion Point (SM/03 /295, 8/18/03).
Under the PRGF Trust, loans for the encashment of rights accumulation programs are also protected by a gold pledge of up to 3 million ounces when resources in the Reserve Account are exhausted. The Reserve Account also serves to meet temporary mismatches between repayments from borrowers and repayments to lenders and to cover the Fund’s costs of administering PRGF operations.
Zimbabwe has been in continuous arrears to the PRGF Trust since mid-February 2001.
The sources of subsidy and grant contributions to the PRGF and PRGF-HIPC Trusts were described in an earlier update paper (SM/02/96, 3/26/02).
Both the PRGF and PRGF-HIPC Trusts are expected to operate through 2019.
Based on Decision No. 12230-(00/l 15), up to SDR 1.76 billion of the amount of the investment earnings on the proceeds from gold sales held in the Special Disbursement Account can be used on an “as needed” basis to meet the cost of the HIPC Initiative.
The resources required consist of PRGF subsidies, which are a function of interest rates, and HIPC Initiative grants, which are largely invariant to interest rates. The resources available comprise grants and investment income earned on grants and deposits, with only the latter dependent on interest rates. The interest-sensitive component of the resources required \s thus considerably larger than the corresponding component of the resources available.
See HIPC Initiative—Information Note on the Calculation of Completion Point Topping Up (SM/02/333, 10/29/02).
For interim countries alone, the additional topping-up cost under the current methodology is estimated at US$729 million, of which the Fund’s share would be about US$48 million.
Topping-up assistance is provided only in exceptional cases when there has been a fundamental change in the member’s economic circumstances due to exogenous factors, adversely affecting its debt sustainability.
As specified in Decision No. 8759-(87/176) ESAF, the PRGF-HIPC Trust can make use of up to SDR 250 million in transfers from the Reserve Account to cover temporary cash shortfalls in the Trust. As of end-July 2003, SDR 43 million had been used for this purpose.
The updated parameters are exchange rates and a six-month average of CIRR as of end-June 2003.
These countries are Albania, Burundi, the Republic of Congo, Guinea-Bissau, Rwanda, Sierra Leone, and Tajikistan. Albania, Rwanda, Sierra Leone, and Tajikistan no longer have outstanding balances on emergency assistance.
