20/9/2002
EU Grants Another Euro 60 Million Debt Relief For Poor Countries

This week the EU decided to grant a further € 60 million debt relief in order to cancel all the special loans owed by Highly Indebted Poor Countries (HIPC) within the African, Caribbean and Pacific (ACP) Group of Nations. These are loans owed to the EU and managed by the European Investment Bank (EIB) at special interest rates. With this new grant the EU goes beyond the enhanced (HIPC) Initiative of international donors and confirms its commitment to helping the least developed ACP countries.

The HIPC initiative is an international co-ordinated approach to bring down poor countries' external debt to a sustainable level. The initiative involves both bilateral and multilateral public creditors as well as commercial creditors. The EU has strongly backed the HIPC initiative since its inception in 1996.

This € 60 Million is in addition to the € 360 million that has been earmarked so far for debt cancellation for EU loans. This part of the financial support under HIPC is administered by the EIB and forms part of the EU's intervention as creditor.

The EU as a donor channels its assistance through the HIPC Trust Fund, which is managed by the World Bank, in favour of African, Asian and Latin American countries. This assistance amounts to € 734 million.

Including this € 60 million, the EU has now lightened the debt of highly indebted poor countries by a total of € 1.15 billion .