1. Multilateral Debt Relief Initiative Implementation Modalities at the African Development Fund MDBs Meeting on Debt Issues Washington, DC June 2006

2. Outline II. Implementation Arrangements
I. Key Features and Scope of MDRI at AfDF
II. Implementation Arrangements
III. Financing and Monitoring Arrangements
IV. Timetable for MDRI Implementation at AfDF

3. Key Features
G8 Proposal (MDRI): cancel 100 percent of debt owed by post-completion point HIPCs to ADF, IDA and IMF to support countries’ efforts to reach the MDGs
42 Eligible HIPCs worldwide of which 33 are AfDF Regional Member Countries (RMCs)
Donors committed to providing additional resources to compensate for forgone credit reflows
Compensatory replacement funds “dollar for dollar” to be reallocated to all AfDF-only countries, including non-HIPCs

4. Key Dates & Debt Coverage
Scope of MDRI at AfDF
Key Dates & Debt Coverage
Cut-off date: December 31, 2004
Implementation date: January 1, 2006
Debt coverage: Debt outstanding and disbursed (DOD)
Country Coverage: 33 RMCs, of which
14 completion point HIPCs
10 post-decision point HIPCs
8 pre-decision point HIPCs
1 Sunset clause country

5. Implementation Arrangements
Eligibility Criteria for Completion Point Countries
Satisfactory macro-economic performance under IMF-PRGF
Satisfactory implementation of poverty reduction strategy
Adequate public expenditure management system, including minimum standards of governance and transparency
Eligibility Criteria for Post-Decision and Pre- Decision Point Countries
For 10 post-decision and 8 pre-decision point countries, reaching completion point - sufficient for MDRI eligibility

6. Estimated Cost of MDRI at AfDF
Estimated Cost: UA 5.84 billion = US$ 8.54 billion
at ADF-X exchange rate (UA1.0 = US$ )
(Cost in UA Million)

7. III. Financing and Monitoring Arrangements
Financing Arrangements
Status of Donor Indicative Pledges for ADF
Effectiveness and Indicative Donor Commitments
Monitoring Arrangements and Voting Rights

8. Financing Arrangements
Compensatory donor resources
Donors committed to preserve ADF financing capacity by providing additional resources to compensate for forgone credit reflows
Secured Financing required over three periods
2006 – 2007 (Remaining ADF – X period): Unqualified commitments
2008 – (Remainder of first decade):
Mostly unqualified, some qualified commitments
2016 – (Subsequent four decades):
Mostly qualified commitments, some unqualified commitments

9. Status of Donor Indicative Pledges for AfDF

10. Effectiveness Triggers and Indicative Commitments
UA 3.91 billion: 70% of qualified and unqualified commitments for 14 CP countries (110.3% of ADF cost)
UA million: 90% of unqualified commitments for financing MDRI in ADF-X period (2006 – 2007) (92.2% of ADF cost)
UA 5.84 billion: 70% of qualified & unqualified commitments for financing 33 eligible countries over entire MDRI period (73.9% of ADF cost)
(Indicative commitments as at mid-June 2006 in brackets)

11. Monitoring Arrangements and Voting Rights
Compensatory Funds from Donors to ADF
Contribution to the MDRI will be recorded and monitored separately from regular ADF replenishment contributions
Monitoring Arrangements
Donor Contributions to finance the MDRI
Beneficiary countries use of resources for poverty reduction
Voting Rights
Additional voting rights for ADF State participants’ contributions for MDRI – approved by BoG Resolution

12. V. Timetable for MDRI Implementation by ADF
19 April 2006: MDRI Approval by BG Boards of Directors
ADF MDRI Implementation Modalities Paper
Final ADF Deputies Report (including BoG Resolution)
Country Eligibility Assessments
18 May 2006: Board of Governors Resolution approved by 89.2% of total voting power (85.0% required)
30 June 2006: 2006 ADF country allocations ready for netting out MDRI debt relief – harmonization of CPIA & DSF rankings w/IDA
30 June 2006: Deadline for Submission of IoCs by donors – to satisfy Effectiveness Triggers
July 2006: Retroactive effectiveness of MDRI as of 1st January 2006, with actual benefits provided to eligible countries, subject to date effectiveness triggers satisfied

13. Thank you for your attention
End of Presentation
Thank you
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