Guinea - The 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. P7755-GN MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON ASSISTANCE TO THE REBUBLIC OF GUINEA UNDER THE ENHANCED HEAVILY INDEBTED POOR COUNTRIES INITIATIVE AND THE MULTILATERAL DEBT RELIEF INITIATIVE September 5, 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 September 4, 2012) Currency Unit = Guinean franc (GNF) US$1.00 = 7190 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 : Ousmane Diagana Sector Director, AFTPM : Marcelo Giugale Sector Director, PRMED : Jeffrey Lewis Sector Manager, AFTP4 : Miria Pigato Task Team Leaders : Emmanuel Fiadzo (AFTP4), Ralph van Doorn (PRMED) Task Team Members : Sebastien Dessus, Judite Fernandes (AFTP4), Eric Bell (AFTP3), Sidra Rehman, Signe Zeikate (PRMED)  MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON ASSISTANCE TO THE REPUBLIC OF GUINEA 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. Completion Point considerations .......................................................................................................... 3 IV. IDA's Delivery of Assistance Under the Enhanced HIPC Initiative .................................................... 4 V. IDA’s Delivery of Assistance Under MDRI......................................................................................... 4 VI. Prospects for Long-Term Debt Sustainability After Debt Relief Under the Enhanced HIPC Initiative and MDRI ............................................................................................................................................. 5 VII. Satisfactory Financing Assurances from Guinea’s Creditors ............................................................... 5 VIII. Recommendation .................................................................................................................................. 5 List of Figures Figure 1. Guinea: Potential costs of the Enhanced HIPC Initiative by Creditor Group, ................................ 3 Figure 2. Guinea: Debt Service to IDA after HIPC Relief and MDRI ........................................................... 5 List of Annexes Annex 1. Guinea: IDA Credits Subject to Debt Service Reduction Under the Enhanced Heavily Indebted Poor Countries Initiative .................................................................................... 7 Annex 2. Guinea: Schedule of Debt Service Reduction Under the Enhanced Heavily Indebted Poor Countries Initiative .................................................................................... 9  MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON ASSISTANCE TO THE REPUBLIC OF GUINEA 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 Republic of Guinea (Guinea) 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 recommendations 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 December 2000, and for the debt relief to be provided irrevocably with respect to the debt owed to IDA. Upon reaching the Completion Point, Guinea 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 “Republic of Guinea: Enhanced Heavily Indebted Poor Countries (HIPC) Initiative Completion Point and Multilateral Debt Relief Initiative (MDRI)