Update on the Financing of the Fund's Concessional Assistance and Debt Relief to Low-Income Member Countries

Commitments under new PRGT-supported programs are expected to increase in 2012 in part reflecting the weaker global economic outlook. PRGT commitments in 2011 amounted to SDR 1.2 billion, unchanged from their 2010 level. Staff projections suggest demand could rise to about SDR 2 billion in 2012. If all elements of the 2009 financing package are secured, the PRGT will have an annual average lending capacity of SDR 2.2 billion over 2012–14, or SDR 1.6 billion through 2015. Additional pledges of SDR 1 billion in loan resources are still required to secure the targeted loan resources approved under the 2009 financing package. Fourteen members have so far pledged SDR 9.8 billion in new loan resources for the PRGT compared with the target of SDR 10.8 billion. New borrowing agreements totaling SDR 9.5 billion have been signed with thirteen lenders.

Abstract

Commitments under new PRGT-supported programs are expected to increase in 2012 in part reflecting the weaker global economic outlook. PRGT commitments in 2011 amounted to SDR 1.2 billion, unchanged from their 2010 level. Staff projections suggest demand could rise to about SDR 2 billion in 2012. If all elements of the 2009 financing package are secured, the PRGT will have an annual average lending capacity of SDR 2.2 billion over 2012–14, or SDR 1.6 billion through 2015. Additional pledges of SDR 1 billion in loan resources are still required to secure the targeted loan resources approved under the 2009 financing package. Fourteen members have so far pledged SDR 9.8 billion in new loan resources for the PRGT compared with the target of SDR 10.8 billion. New borrowing agreements totaling SDR 9.5 billion have been signed with thirteen lenders.

I. Introduction1

1. This paper reviews the status of financing for the Fund’s concessional lending and debt relief for low-income countries (LICs).2 It is based on the latest available data and projections, and takes into account the pledges made thus far in response to the Managing Directors’ fund-raising requests of August 2009 and February 2012.

2. The paper is organized as follows. Section II describes progress in the implementation of the July 2009 reform of the Fund’s concessional lending instruments and the associated financing framework. Section III reviews PRGT operations and discusses developments in the PRGT Reserve Account. Section IV provides updates on the subsidization of emergency assistance, while Section V presents the developments on the financing of debt relief under the HIPC, MDRI, and the Post-Catastrophe Debt Relief (PCDR) Trust.

II. LIC Facilities and Financing Framework

3. Since the effectiveness of the LIC reforms in January 2010, lending commitments to LICs have been approved under all three PRGT facilities—the Extended Credit Facility (ECF), the Standby Credit Facility (SCF), and the Rapid Credit Facility (RCF).3 Loan and subsidy resources have been made available for all the loan and subsidy accounts of the PRGT (Figure 1). Total commitments under the ECF from January 2010 to end-December 2011, including augmentations under existing programs, amounted to SDR 2.2 billion, while commitments under the SCF and RCF amounted to SDR 0.1 billion each. In view of the closure of the Exogenous Shocks Facility (ESF) Subsidy Account in May 2010 after resources in that account were depleted, resources in the ECF Subsidy Account are available to meet the subsidy requirements of existing ESF loans.

Figure 1.
Figure 1.

Concessional Financing Framework

Citation: Policy Papers 2012, 034; 10.5089/9781498340571.007.A001

1/ Transfers may be made from the General Subsidy Account for subsidizing ENDA/EPCA credit on an “as needed” basis.

4. The first review of the PRGT interest rate structure, provided for under the 2009 reforms, was completed in December 2011 (Box 1).4 In view of the severe downside risks to the global economy, the Executive Board endorsed a one-year extension of the temporary interest waiver on PRGT loans through end-December 2012 (and January 2013 for subsidized EPCA and ENDA credits). The additional cost of extending the temporary interest waiver was estimated to be modest since application of the interest rate mechanism would anyway have resulted in a zero interest rate on ECF and RCF loans. The December 2011 decision provides that interest rates will revert to those indicated by the interest rate mechanism starting in 2013, thus allowing the differentiated interest rate structure to operate.5 The next review of PRGT interest rate structure would be completed by December 31, 2013.

5. In February 2012, the Executive Board reviewed the framework that was established in 2010 for PRGT eligibility and the list of PRGT-eligible countries.6 Based on the application of the framework, no countries were added to, or graduated from, the list of PRGT-eligible countries. The population threshold used to define small states under the framework was raised, however, from 1 million to 1.5 million, aligning it with the definition adopted by the World Bank. A more comprehensive review of PRGT-eligibility will take place by early-2013.

6. The LIC financing package, approved in July 2009 as part of the LIC reforms, remains appropriate.7 The package aims to increase the Fund’s concessional lending capacity to SDR 11.3 billion for the period 2009-14, and requires the mobilization of new loan resources of SDR 10.8 billion to meet projected demand (including a liquidity buffer of SDR 1.8 billion to enable a voluntary encashment regime). The package also includes mobilization of new subsidy resources of SDR 1.5 billion (end-2008 NPV terms). Most of the additional subsidies are financed from the Fund’s internal resources—including transfers from the PRGT Reserve Account, delaying until FY 2013 the resumption of reimbursement of the GRA for PRGT administrative costs, and use of resources linked to gold sales. However, new bilateral subsidy contributions of SDR 200-400 million (end-2008 NPV terms) are also important to complete the financing package. The Managing Director approached a wide spectrum of the membership in 2009 to mobilize the required loan and subsidy resources, and staff continues to follow up on these requests.

PRGT Interest Rate Mechanism

The PRGT interest rate mechanism was established in 2009 to balance several competing objectives,1 including: (i) making the financing term structure more concessional; (ii) preserving the Fund’s scarce concessional resources; (iii) tailoring financing terms to the needs and capacity of LICs; and (iv) limiting fluctuations in concessionality and subsidy costs. The framework involves setting interest rates for outstanding balances under each of the PRGT facilities, and explicitly links the PRGT interest rate structure to world interest rates. The framework requires a review every two years to take account of developments in world interest rates.

Under the framework, the applicable interest rates on outstanding loan balances under the ECF, SCF and RCF would depend on prevailing SDR interest rates, with a modest differentiation in the interest rate between facilities to account for the expectation that SCF users will on average have somewhat higher capacity to service debt (Table 1).

Table 1.

Interest Rate Mechanism for the Fund’s Concessional Facilities1

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The average SDR rate is based on the most recently observed 12-month period.

1 See Section II, paragraph 4(b) of the PRGT Instrument as amended by Decision No. 14354-(09/79), adopted July 23, 2009 and effective January 7, 2010.

III. Financing of PRGT Operations

A. Projected Financing Needs

7. In 2011, commitments under new PRGT arrangements amounted to SDR 1.2 billion, the same level as in 2010. This is broadly in line with projections at the time the new LIC financing package was approved. The new PRGT commitments in 2011 (Table 1 and Figure 2) comprised of: (i) five new ECF arrangements amounting to SDR 897.5 million; (ii) four augmentations of existing ECF arrangements in the amount of SDR 201.7 million; (iii) one new SCF arrangement amounting to SDR 5.2 million; and (iv) four new disbursements under the RCF in the amount of SDR 88.5 million.

Figure 2.
Figure 2.

PRGT Commitments to LICs, 1988-2011

(as of end-December 2011)

Citation: Policy Papers 2012, 034; 10.5089/9781498340571.007.A001

Table 1.

New PRGT Commitments to LICs in 2011

(In millions of SDRs, as of end-December 2011)

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8. Weak global economic prospects and significant downside risks to the outlook could lead to higher demand for concessional loans than has been observed over the last two years. Information provided by area departments indicates that demand for PRGT loans in 2012 could pick up to around SDR 2 billion. However, this projection is subject to uncertainty related to the global economic outlook and the timing of potential requests from some members with larger quotas.

9. The PRGT has sufficient capacity to accommodate a higher level of demand during 2012-14. Provided that the 2009 LIC financing package, which aimed to increase the Fund’s concessional lending capacity to SDR 11.3 billion during 2009-14, is completed, the PRGT would have a lending capacity of about SDR 2.2 billion annually during 2012-14 (Table 2, middle panel).8 In this higher-demand scenario, the self-sustained operations of the PRGT could commence in 2015 with the capacity to subsidize annual commitments of about SDR 0.7 billion. However, in a lower-demand scenario where demand in the medium term is assumed to be about SDR 1.6 billion annually, available resources at end-2014 could support an annual commitment of about SDR 0.8 billion (Table 2, lower panel).

Table 2

Scenarios of Medium Term Concessional Lending to LICs

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Source: Finance Department.

Excluding the relatively high level of lending committed to Pakistan in the aftermath of 9/11, and to Liberia in 2008 following arrears clearance.

May not add up due to rounding.

Assuming exchange rate of US$1.5 per SDR.

B. Loan Resources

10. Further progress is required to secure the loan resources approved in the context of the 2009 LIC financing package. No new pledges have been made since the last update. Fourteen members have so far pledged SDR 9.8 billion in new loan resources for the PRGT compared with the target of SDR 10.8 billion and new borrowing agreements amounting to SDR 9.5 billion have been signed with thirteen lenders (Table 3). Two-thirds of the secured resources (SDR 6.2 billion) have been made available to the General Loan Account (GLA), about 31 percent to the ECF Loan Account (SDR 2.9 billion), and the remainder (SDR 0.3 billion) to the SCF and RCF Loan Accounts.

Table 3.

New Commitments of Loan Resources to the PRGT 1/ (In millions of SDRs; as of end-February, 2012)

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Germany (KfW) made a pledge of SDR 1.53 billion. As mutually acceptable lending terms could not be agreed, it is excluded from the total.

11. New PRGT borrowing agreements have made use of the elements of the new framework for mobilizing bilateral loan resources, including providing loan resources to the PRGT in SDRs.9 No new borrowing agreements have been concluded since the last update. Loan resources have been provided through both traditional Loan Agreements and Note Purchase Agreements (NPAs), and seven members have included in their borrowing agreements participation in the encashment regime of the PRGT.10 Five of the borrowing agreements also have shorter initial maturities than in the case of traditional loan agreements.11 Eight of the new borrowing agreements provide loan resources to the PRGT in SDRs, and all these contributors have in place voluntary SDR trading arrangements.12 Since June 2011, drawings amounting to SDR 489.7 million have been made under the new SDR borrowing agreements, and sales of SDRs related to these drawings amounted to SDR 423.9 million. These sales were conducted through the voluntary SDR trading arrangements.

12. Uncommitted PRGT loan resources, including the recently secured resources, amounted to SDR 7.3 billion at end-February 2012. Specifically, available resources of the GLA and the Special Loan Accounts (SLA) for the ECF, SCF and RCF amounted to SDR 6.2 billion, SDR 1.0 billion, SDR 0.07 billion, and SDR 0.04 billion respectively.13

13. Additional pledges of loan resources of about SDR 1 billion are still needed to reach the target in the 2009 financing package (Table 4). The 2009 LIC financing package targeted new loan contributions of SDR 10.8 billion to support the projected concessional lending of SDR 11.3 billion through 2014-15, including a liquidity buffer of SDR 1.8 billion to enable the voluntary encashment regime. It is important that existing pledges of loan resources be finalized and new pledges made to complete the loan package.

Table 4.

PRGT Loan Resources Mobilization (In billions of SDRs; as of end-February 2012)

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Secured through Loan Agreements with Canada, Denmark, France, Italy, Korea, the Netherlands, Norway, Saudi Arabia, Spain, and Switzerland and through Note Purchase Agreements with China, Japan, and the United Kingdom.

C. Subsidy Resources

14. Available subsidy resources at end-December 2011 amounted to SDR 1.4 billion, excluding contributions received or committed in the context of the current fund-raising effort.14 This amount includes all contributions pledged during the 2005 ESF fund-raising exercise, including SDR 55.2 million that are expected to be received (Table 5). However, it excludes SDR 25.9 million pledged during earlier fund-raising that donors have not yet provided (Table 6). Given that about SDR 1 billion is estimated to be needed to subsidize existing PRGT commitments, about SDR 0.4 billion of these resources are currently available to subsidize new lending.

Table 5.

ESF Subsidy Contributions (In millions of currency units; end-December 2011)

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To be generated from the concessional loan as an implicit subsidy.

Reflecting net investment income (in end-2005 NPV terms) to be generated from deposit/investment agreements.

Table 6.

PRG-HIPC Trust - Pending Contributions (In millions of SDRs “as needed”; end-February 2012)

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Remaining balances.

15. The 2009 LIC financing package remains adequate to ensure the availability of resources to subsidize projected new lending of up to SDR 11.3 billion through 2014-15. As was envisaged, this package aims to secure additional subsidy resources of at least SDR 1.5 billion (end-2008 NPV terms) to enable the PRGT to provide new lending to LICs of SDR 11.3 billion from 2009 to at least 2014. Subsidy resources would remain adequate to support PRGT lending through 2014 with a higher lending capacity of about SDR 2.2 billion per year for 2012-14, or through 2015 if medium-term demand was in the order of SDR 1.6 billion per year.

16. Progress has been made in securing bilateral subsidy resources under the 2009 LIC financing package for the PRGT. Since the last update paper, two additional members (Japan and the United Kingdom) have made pledges totaling SDR 48.6 million. As of end-March 2012, a total of twenty-five members have committed SDR 203 million in additional subsidies (Table 7). This is broadly in line with the lower end of the target range of SDR 0.2-0.4 billion (in end-2008 NPV terms) envisaged under the 2009 financing reform package for such contributions. Contributors include traditional as well as non-traditional donors, several of whom are emerging market countries. The staff continues to explore possible bilateral contributions with other donors, and these contributions remain important as part of the multilateral effort to strengthen the Fund’s concessional lending capacity.

Table 7.

New Subsidy Commitments to the PRGT (In millions of currency units; as of end-March, 2012)

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Reflecting net investment income (in end-2008 NPV terms) to be generated from investment agreements.

Calculated using the exchange rates as of March 30, 2012.

17. In February 2012, the Executive Board approved the partial distribution of the general reserve equivalent to SDR 700 million attributed to part of the windfall profits from the recent gold sales, and assurance from the membership regarding new PRGT subsidy contributions are now needed.15 The distribution, part of the 2009 LIC financing package aimed at securing adequate resources for the PRGT, will be made to all members in proportion to their quotas on the date of the distribution, and will be effected only when the Managing Director has provided notification to the Executive Board that, in her assessment, satisfactory assurances exist regarding the availability of at least SDR 630 million for a new subsidy contribution to the PRGT. As at April 30, 69 members representing 48.67 percent of the proposed distribution have confirmed they would contribute their shares of the distribution, or equivalent amounts, to the PRGT (Table 8). It is important that assurances from the membership be secured in a timely manner to complete the financing package.

Table 8.

PRGT Subsidy Pledges Based on the Partial Distribution1

(As of April 30, 2012)2

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Pledges based on the partial distribution of the general reserve attributed to part of the windfall profits from the recent gold sales. Pledges may be subject to domestic processes to enable members to make PRGT subsidy contributions.

Responses were requested by April 30, 2012.

D. PRGT Reserve Account

18. The PRGT Reserve Account will continue to provide adequate security to PRGT lenders and note purchasers. The Account has been financed by reflows of Trust Fund and Structural Adjustment Facility repayments, as well as investment returns on balances held in the Account. The PRGT can tap these resources temporarily to meet its obligations in the event of a delayed payment by a borrower to any loan account of the Trust. The balance in the Reserve Account amounted to SDR 4.0 billion at end-2011, representing a substantial multiple of the projected PRGT repayments falling due over the next twelve months and about 78 percent of total PRGT obligations (Appendix Table 4).16 It is expected that the Reserve Account will continue to provide a loan coverage ratio of about 40 percent in the medium term, in line with the historical average.

Appendix Table 4.

PRGT Reserve Account Coverage (In millions of SDRs; end-period)

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The decline in total PRGT credit outstanding by about 40 percent from 2005 reflects early repayments arising from the delivery of HIPC and MDRI debt relief.

19. It is envisaged that the resources in the Reserve Account could support subsidization of PRGT lending beyond 2014 on a “self-sustained” basis. Available subsidy resources as well as subsidy resources being raised in the context of the 2009 financing package would be sufficient to support concessional lending through 2014. In the absence of additional funding, staff projections suggest that the Reserve Account could subsidize about SDR 0.7-0.8 billion in nominal terms, starting from 2015. These projections incorporate revised estimates of the annual cost of reimbursement of the GRA by the PRGT, which reflect the adoption of a new comprehensive costing methodology for PRGT administrative expenses (see Annex 1). The effect on subsidization capacity of higher annual reimbursement costs of SDR 64 million, compared with the earlier estimate of SDR 50 million, is largely offset by lower estimated subsidy costs in the period through 2014 stemming from the prolonged period of the low SDR interest rates. These projections, however, are subject to significant uncertainties, including: PRGT demand in the medium term; the rate of return on investment of the Reserve Account balance; the interest rate paid to lenders to the Trust; and the timing of repayment of overdue Trust Fund, SAF, and PRGT obligations by the protracted arrears cases.

20. Staff projections indicate that longer term demand for the Fund’s concessional lending could be SDR 1.1-1.9 billion annually up to 2034.17 Based on these projections, additional subsidy resources would need to be mobilized to ensure that the PRGT has sufficient capacity to meet the expected demand. The framework for concessional lending on a self-sustained basis would therefore have to be revisited at an appropriate time to ensure that the lending capacity remains in line with projected demand.18

IV. Subsidization of Emergency Assistance

21. The EPCA/ENDA Administered Subsidy Account is being maintained on an interim basis for the subsidization of EPCA/ENDA credits outstanding on January 7, 2010. Once these outstanding credits are fully repaid (expected by April 2013), the EPCA/ENDA Administered Subsidy Account will be terminated. Contributors will be encouraged at that time to transfer any balances in the account to the PRGT General Subsidy Account (GSA), or one of the special subsidy accounts of the PRGT (Appendix Table 5).

Appendix Table 5.

Subsidy Contributions for Emergency Assistance (In millions; as of end-December 2011)

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For contributions which have been fully received, the SDR equivalent is the actual SDR amount received using the exchange rate on the value date. For contributions that are not yet disbursed, the SDR equivalent is calculated using the exchange rate at end-December 2011.

Reflecting investment income to be generated on a deposit agreement, effective May 2006.

To subsidize the rate of charge on purchases by Sri Lanka and Maldives under ENDA following the 2004 Tsunami.

Existing contribution, previously earmarked for ENDA.

Existing contribution, previously earmarked for EPCA.

22. Available resources in the EPCA/ENDA Administered Subsidy Account are estimated to be sufficient to subsidize the remaining EPCA/ENDA credits. At end-2011, two PRGT-eligible members had outstanding ENDA credits (Bangladesh and Dominica) amounting to SDR 101.3 million. There were no PRGT-eligible members with outstanding EPCA credits. At end-2011, available subsidy resources amounted to SDR 10.2 million. It is estimated that these resources are likely to be sufficient to subsidize the outstanding credits, including for the additional interest relief through January 2013. In the event that subsidy resources in the EPCA/ENDA subsidy account were depleted, the PRGT Instrument would allow for the subsidization of outstanding credits from the PRGT GSA.

V. Financing of Debt Relief

23. At end-2011, the Fund had provided a total of SDR 5.2 billion of debt relief to eligible countries. This includes HIPC debt relief of SDR 2.5 billion to 36 countries, MDRI debt relief of SDR 2.3 billion to 30 countries, “beyond-HIPC” debt relief to Liberia, and PCDR debt relief to Haiti (Appendix Tables 6 and 7). No new countries reached the HIPC completion point since the last update, and the total number of completion point countries is 32. There remain 4 decision point countries which at end-December 2011 received HIPC interim assistance of about SDR 34 million from the Fund. No debt relief has been provided through the PCDR Trust since the last update, and the balance in the PCDR Trust was SDR 0.1 billion at end-December 2011.

Appendix Table 6.

Implementation of the HIPC Initiative (In millions of SDRs; end-December 2011)

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Includes the commitment made in NPV terms plus interest earned on that commitment.

AAt the time of its decision point, Afghanistan did not have any outstanding eligible debt.

Includes commitment under the original HIPC Initiative.

Amount committed to Côte d’Ivoire under the enhanced HIPC Initiative only.

The Kyrgyz Republic became ineligible for debt relief under the HIPC Initiative in November 2011 based on newly introduced end-2010 indebtedness criterion.

Also includes SDR 17 million committed to C ôte d’Ivoire under the original HIPC Initiative.

Appendix Table 7.

Debt Relief Following Implementation of the MDRI (In millions of SDRs; end-December 2011)

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Amount outstanding at the completion point (net of repayments between January 1, 2005 to the completion point date).

Balances available at the time of MDRI debt relief.

Afghanistan, Haiti, and Togo did not have MDRI-eligible credit and did not receive MDRI debt relief.

Liberia received “MDRI-like” (beyond-HIPC) debt relief at end-June 2010, which was financed from the Liberia Administered Account. Its eligible credit outstanding corresponds to the amount of arrears clearance to the IMF in March 2008.

Non-HIPCs but qualified for MDRI debt relief with a per capita income below the US$380 threshold.

A. Remaining HIPCs

24. In November 2011, the Executive Board reviewed the status of implementation of the HIPC Initiative and MDRI, and further restricted the list of HIPC eligible countries.19 An end-2010 indebtedness criterion was added for eligibility for assistance under the HIPC Initiative, effectively ring-fencing further the list of eligible or potentially eligible countries. The expanded criteria had the effect of eliminating from eligibility three countries whose external debt was assessed as well below the initiative’s thresholds—Bhutan and Lao P.D.R., both of which had indicated they do not wish to avail themselves of HIPC assistance, and the Kyrgyz Republic.

25. The Fund’s cost of debt relief for the remaining HIPCs (excluding the protracted arrears cases) is estimated at SDR 0.04 billion (end-2011 NPV terms), which is in line with previous estimates (Table 9).20 This estimate excludes the arrears cases and is based on assumptions regarding the timing of HIPC completion point and the future path of interest rates, all of which are subject to uncertainty. Moreover, the estimate does not take into account potential needs for topping-up assistance.

Table 9.

Financing of Debt Relief to the Remaining HIPCs (In billions of SDRs; end-December 2011 NPV terms)

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Since the HIPC sub-account is depleted, resources of SDR 0.04 billion are expected to be drawn from the PRG-HIPC sub-account to meet the estimated cost of the remaining HIPCs.

26. Available resources in the PRG-HIPC and MDRI Trusts are estimated to be sufficient to cover debt relief for the remaining eligible countries (excluding the protracted arrears cases). Since the HIPC sub-account of the PRG-HIPC Trust is depleted, resources of about SDR 0.04 billion from the PRG-HIPC sub-account are expected to be used to cover the projected HIPC needs. The two MDRI Trusts are expected to have surpluses totaling about SDR 0.05 billion (Table 9).

B. Pending Contributions to Liberia’s Debt Relief

27. Following Liberia’s HIPC completion point, there remain a number of countries that have yet to finalize their pledged contributions to the Fund’s debt relief for Liberia. Since the last update, no further contributions have been received from the remaining countries who had pledged contributions. Pledged contributions totaling SDR 17.7 million (March 2008 NPV terms) from eight members have yet to be received (Table 10). It is important that these contributions be disbursed as soon as possible to replenish the PRG-HIPC Trust.

Table 10.

Pending Disbursements to Finance Debt Relief to Liberia as of end-February 2012

(In millions of SDRs; in March 14, 2008 NPV terms)

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28. The SCA-1/Deferred Charges Administered Account holds a balance from one member. The Executive Board approved a decision to delay the termination date of the account to March 13, 2014, to allow completion of the procedures that would allow the disbursement of the pledged contribution (SDR 16.9 million in March 14, 2008 NPV terms) for financing Liberia’s debt relief.21 It is expected that this amount would by that time be transferred to the PRG-HIPC Trust, which financed the shortfall in members’ contributions relative to their commitments for the financing of Liberia’s debt relief.

C. Protracted Arrears Cases

29. Providing debt relief to Somalia and Sudan would require substantial additional resources. At end-February 2012, the total amount of overdue financial obligations of these two countries to the IMF amounted to SDR 1.2 billion.22 As the cost to the Fund for providing debt relief to these countries was not included in the original costing estimates for the HIPC Initiative,23 additional financing would need to be secured when these members are ready to clear their arrears and embark on the HIPC Initiative and possible “beyond-HIPC” debt relief.24 The approach developed for Liberia’s debt relief, including the financing modalities, could provide a useful framework for Somalia and Sudan at the appropriate time.

30. Additional resources could potentially be required to provide debt relief to Zimbabwe, if it is assessed to be eligible. Zimbabwe is currently neither PRGT-eligible, nor is it included in the list of “ring-fenced” countries that could benefit from the HIPC Initiative. However, if Zimbabwe’s PRGT-eligibility is restored following clearance of its arrears to the PRGT (SDR 87.5 million at end-February 2012), an assessment of Zimbabwe’s eligibility for the HIPC Initiative would need to be made based on the relevant criteria, including whether the NPV of its external debt at end-2004 and end-2010 exceeded the HIPC thresholds. Additional resources may be needed to cover any such HIPC and “beyond-HIPC” debt relief for Zimbabwe.

Appendix Table 1.

Summary of Bilateral Commitments to the PRGF-ESF and PRG-HIPC Trusts (In millions of SDRs; as of December 31, 2011)

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Less than SDR 5,000.

These are contributions originally pledged for the PRGF-ESF Trust which are now available for the PRGT. Excludes the G-8 commitment of SDR 100 million in end-2005 NPV terms, new ESF subsidy contributions, and any subsidy contribution made in the context of the LIC reform of 2009.

Estimated values of total contributions include forthcoming contributions that are not yet received. The term “as needed” refers to the nominal sum of concessional assistance taking into account the profile of subsidy needs associated with PRGF lending and the provsion of HIPC assistance, respectively.

Including new borrowing agreement in support of 2009 reform of LIC facilities.

Including a borrowing agreement in support of the establishment of the ESF.

Appendix Table 2.

PRGT—Borrowing Agreements (In millions of SDRs; as of end-December, 2011)

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Including additional loan comm itments for interim PRGF operations.

Committed to the General Loan Account of the PRGT.

Committed to the ECF Loan Account of the PRGT.

Before April 17, 1998, known as Caisse Française de Développement:

The loan commitment, which became effective on August 20, 2009, was made in the context of establishment of the ESF.

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.

Committed to the SCF Loan Account and RCF Loan Account of the PRGT in equal proportion.

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 disb ursed 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 Ma rch 1994.

On August 26, 1998, the SFD indicated that it did not intend to make further loans in association with the PRGF.

Any m ismatch of outstanding resources between the amount owed by PRGF borrowers and the amount owed to PRGF lenders arise s because of m ismatches in timing between drawdowns from lenders to the Trust and disbursements ofPRGF loans to borrowers.