The Multilateral Debt Relief Initiative (G-8 Proposal) and Its Implications for the Fund - Further Considerations - Supplement on Financing Arrangements

Policy Papers, November 1, 2005

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The Multilateral Debt Relief Initiative (G-8 Proposal) and Its Implications for the Fund - Further Considerations - Supplement on Financing Arrangements

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Bibliographic details

• Published: November 1, 2005
• Series: Policy Papers

Summary

• This supplement discusses the financial structure for the implementation of the G-8 debt relief proposal or Multilateral Debt Relief Initiative (MDRI).
• Implementation of the MDRI will require action by the Executive Board and by contributions to the Subsidy Account of the PRGF Trust.
• To be in a position to deliver debt relief under the MDRI by the beginning of 2006 will require the early adoption by the Board of a number of decisions.
• It will also require the timely consent by all contributors to the Subsidy Account of the PRGF Trust to an amendment of the PRGF Trust Instrument that would allow the transfer of a portion of their resources to a new administered account for use in providing MDRI debt relief to HIPCs with incomes above the MDRI threshold.

Implementation requirements

• Action by the Executive Board is required.
• Contributions to the Subsidy Account of the PRGF Trust are required.
• Timely consent by all contributors to the Subsidy Account of the PRGF Trust to amend the PRGF Trust Instrument is required.

Timing and decisions

• Delivering debt relief under the MDRI by the beginning of 2006 depends on the early adoption by the Board of a number of decisions.

Amendment and resource transfers

• The required amendment to the PRGF Trust Instrument would allow the transfer of a portion of contributors’ resources to a new administered account.
• Resources transferred to the new administered account would be used to provide MDRI debt relief to HIPCs with incomes above the MDRI threshold.

Subject tags (as listed)

• Debt relief
• Group of Eight
• Heavily indebted poor countries
• HIPC Initiative
• Poverty Reduction and Growth Facility Trust
• Special Disbursement Account

The Multilateral Debt Relief Initiative (G-8 Proposal) and Its Implications for the Fund - Further Considerations - Supplement on Financing Arrangements, November 1, 2005.