Press Release

OPEC Fund extends debt relief to Burkina Faso under Enhanced HIPC Initiative

112/2005 November 22, 2005, Ouagadougou, Burkina Faso
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The OPEC Fund for International Development today signed an agreement with Burkina Faso for the provision of debt relief within the framework of the EnhancedHeavily Indebted Poor Countries (HIPC) Initiative.

Endorsed by the Interim and Development Committees of the World Bank and the International Monetary Fund in September 1996, the Initiative represents a unified effort by the international community to address the external debt problems of the world’s heavily indebted poor countries. Specifically, it aims to reduce the debt of eligible countries to sustainable levels (subject to satisfactory policy performance) in order to ensure that adjustment and reform efforts are not put at risk by continued high debt and debt service burdens. As the Initiative requires participation by all relevant creditors, debt relief efforts entail coordinated actions by the international finance community, including multilateral institutions.

The OPEC Fund has, from the very beginning, expressed its support of the HIPC Initiative and participated actively in its design. Under the Initiative, the Fund has approved debt relief to 22 countries, 18 of which are in Africa and four in Latin America.

In September 1997, a comprehensive debt reduction package for Burkina Faso was agreed upon by the IMF and the World Bank. The package is expected to save the country around US$930 million in debt service over the coming years. In present value (PV) terms, the package is equivalent to US$553 million. This assistance will enable Burkina Faso to direct more resources towards education, health and other vital social programs as planned in its poverty reduction strategy.

The OPEC Fund has been involved in development activities in Burkina Faso for over two decades, providing balance of payments support, co-financing a commodity imports program and supporting projects in the multi-sectoral, transportation, water supply and sewerage, education, health and agriculture sectors. The country has also received a number of grants and has benefited from the Fund's initiative against HIV/AIDS in Africa. Under today’s agreement, financing in the amount of US$10 million will be made available to ease Burkina Faso’s debt burden. This is in addition to the US$10.5 million already provided.

The agreement was signed in Ouagadougou by HE Mr. Jean Baptiste Campaore, Minister of Finance and Budget of Burkina Faso, and by Mr. Suleiman J. Al-Herbish, Director-General of the OPEC Fund.