Press Release
4 January 2005
Multilateral Debt Relief for Sri Lanka
Hilary Benn, Secretary of State for International Development, has today announced that Sri Lanka will be added to the list of countries eligible for the new
multilateral debt relief initiative announced by the Chancellor in September 2004.
Under this initiative the UK will pay its share, approximately 10%, of the debt service payments owed by eligible countries to IDA - the concessional lending arm of the World Bank. We hope that other donors will join the UK so that up to 100% of Sri Lanka’s debt service payments to these institutions can be covered, freeing up resources to be spent on the Asian Tsunami reconstruction effort and poverty reduction.
Mr Benn said:
“This is a desperate situation which requires us all to do whatever we can to help the countries affected get back on their feet. I will be visiting the region over the next few days to see for myself the situation on the ground and to hold talks with the Governments there to discuss the relief effort.
“I am including Sri Lanka in this initiative because of the enormous difficulties it is facing in dealing with this emergency. This will make available a further £3.6m in 2005, £3.8m in 2006 and £4m in 2007 and will free up £52m over the 10 year period from the UK alone, but these figures will increase significantly if other donors join us as we take this initiative forward. “
This debt service relief will be guaranteed for eligible countries until 2015 to ensure greater predictability of the flow of debt relief. This should allow eligible countries to better plan their poverty reduction programmes. In 2015 a review of debt sustainability could be undertaken, with further relief committed if necessary.
Notes to Editors
1. The UK will also continue to call for a revaluation or off-market sale of further IMF gold to fund the IMF’s share of further multilateral debt relief for eligible countries.
2. For media enquiries please call 0207 023 0600.
