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The Inter American Development Bank (IDB) will cancel USD 1,300 million from Bolivia's debt, which amount to more than 80 per cent of its outstanding balance. The resolution was adopted during the IDB governors meeting on July 17 at Washington, according to the information provided by the Development Planning Minister, Carlos Villegas.

USD 25 million per year will be provided for production in 148 municipalities through an assistance program

Bolivia’s debt with the IDB amounts to around USD 1,600 million, 300 million of which will not be cancelled because that would diminish the equity of ordinary loans of the financial institution (equity resources).

Instead, the USD 1,300 million relieved belong to resources from the Fund of Special Operations (FSO), namely, the soft loan window with long terms and low interests granted to developing countries.

Villegas told the media that “the governors assembly gave an institutional support to the debt cancellation”.

The resolution would allow the country to stop paying the IDB some USD 25 million per year for debt servicing (repayment plus interests).

These endowed resources would be earmarked for financing the Communities in Action Program, in order to promote production development in 148 poor municipalities of the country.
Bolivia asked the Inter-American Development Bank that the debt cancellation does not imply an impediment to access to concesional (soft) credits. This means that rich countries would have to replenish the Fund of Special Operations’ resources.

Cancelled credits would be those borrowed by Bolivia up to December 31, 2004 (the cancellation date).

The cancellation modality and the way those IDB resources would be repaid will be defined by this institution from now until November of this year.

By now the Fundación Jubileo has information just for the Bolivian case. We are trying to get more details on such an important news.

Related Information:

Latin America demands IDB debt cancellation

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