Press Release

OPEC Fund extends debt relief to Ethiopia under Enhanced HIPC Initiative

132/2005 December 21, Vienna, Austria
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The OPEC Fund for International Development today signed an agreement with Federal Democratic Republic of Ethiopia for the provision of debt relief within the framework of the Enhanced Heavily 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 24 countries, 20 of which are in Africa and four in Latin America.

The OPEC Fund has been involved in development activities in Ethiopia for over two decades, providing balance of payments support, and helping finance projects in the transportation, agriculture, national development banks and education sectors. The country has also received a number of grants, and was a beneficiary of the Fund's Food Aid Special Grant Account and the OPEC Fund's initiative against HIV/AIDS in Africa. Under today’s agreement, financing in the amount of US$6.5 million will be made available to ease Ethiopia’s debt burden.

The agreement was signed in Vienna, Austria by HE Mr. Halima Mohammed, Ambassador of the Federal Democratic Republic of Ethiopia in Austria, and by HE Mr. Jamal Nasser Lootah, Chairman of the Governing Board of the OPEC Fund.