Comoros - Enhanced heavily indebted poor countries initiative and the multilateral debt relief initiative : President's memorandum and recommendation

 Document of The World Bank FOR OFFICAL USE ONLY Report No. P7760-KM MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON ASSISTANCE TO THE UNION OF THE COMOROS UNDER THE ENHANCED HEAVILY INDEBTED POOR COUNTRIES INITIATIVE AND THE MULTILATERAL DEBT RELIEF INITIATIVE November 26, 2012 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS (Exchange rate effective as of October 31, 2012) Currency Unit = Comorian franc (KMF) US$1.00 = KMF 380.00 WEIGHTS AND MEASURES Metric System FISCAL YEAR January 1 – December 31 ABBREVIATIONS AND ACRONYMS DRA Debt Relief Analysis ECF Enhanced Credit Facility HIPC Heavily Indebted Poor Countries IDA International Development Association IMF International Monetary Fund JSAN Joint Staff Advisory Note MDRI Multilateral Debt Relief Initiative PR Progress Report PRGF Poverty Reduction and Growth Facility PRSP Poverty Reduction Strategy Paper PV Present Value Vice President, AFR : Makhtar Diop Vice President, PRM : Otaviano Canuto Country Director : Haleh Bridi Sector Director, AFTPM : Marcelo Giugale Sector Director, PRMED : Jeffrey Lewis Sector Manager, AFTP1 : John Panzer Task Team Leaders : Noro Andriamihaja (AFTP1), Ralph van Doorn (PRMED) Task Team Members : Alain d’Hoore (AFTP1), Sylvain Rambeloson (AFTPE), Harisoa Rasolonjatovo (AFTEE), Voahirana Rajoela (AFTHE), Rondro Rajaobelison, Josiane Rarivoson (AFMMG), Marcelo Andrade and Madeleine Chungkong (AFTP1), Signe Zeikate (PRMED)  MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON ASSISTANCE TO THE UNION OF THE COMOROS UNDER THE ENHANCED HEAVILY INDEBTED POOR COUNTRIES (HIPC) INITIATIVE AND THE MULTILATERAL DEBT RELIEF INITIATIVE (MDRI) Table of Contents I. Background............................................................................................................................................. 1 II. Fulfillment of Completion Point conditions ........................................................................................... 2 III. IDA's Delivery of Assistance Under the Enhanced HIPC Initiative ...................................................... 4 IV. IDA’s Delivery of Assistance Under MDRI .......................................................................................... 4 V. Prospects for Long-Term Debt Sustainability After Debt Relief Under the Enhanced HIPC Initiative and MDRI ............................................................................................................................................... 5 VI. Satisfactory Financing Assurances from the Comoros’s Creditors ........................................................ 5 VII. Recommendation .................................................................................................................................... 6 List of Figures Figure 1. Comoros: Potential costs of the Enhanced HIPC Initiative by Creditor Group .............................. 4 Figure 2. Comoros: Debt Service to IDA after HIPC Relief and MDRI........................................................ 5 List of Annexes Annex 1. Comoros: IDA Credits Subject to Debt Service Reduction Under the Enhanced Heavily Indebted Poor Countries Initiative................................................................................................................................. 7 Annex 2. Comoros: Schedule of Debt Service Reduction Under the Enhanced Heavily Indebted Poor Countries Initiative ......................................................................................................................................... 8  MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON ASSISTANCE TO THE UNION OF THE COMOROS UNDER THE ENHANCED HEAVILY INDEBTED POOR COUNTRIES (HIPC) INITIATIVE AND THE MULTILATERAL DEBT RELIEF INITIATIVE (MDRI) 1. I submit for your approval the following Memorandum and Recommendation on the assistance to be provided to the Union of the Comoros (hereafter the Comoros) under the Enhanced Heavily Indebted Poor Countries (HIPC) Initiative with respect to the debt owed by this country to the International Development Association (IDA). This report and its recommendation address the criteria for reaching the completion point under the Enhanced HIPC Initiative as agreed by the Executive Directors of IDA and the International Monetary Fund (IMF) in June 2010, and for the debt relief to be provided irrevocably with respect to the debt owed to IDA. Upon reaching the completion point, the Comoros will become eligible for debt relief under the Multilateral Debt Relief Initiative (MDRI) from IDA. 2. This document complements the joint IDA-IMF Board document entitled “Union of the Comoros: Enhanced Heavily Indebted Poor Countries (HIPC) Initiative Completion Point and Multilateral Debt Relief Initiative (MDRI)