Contribution to reducing Bolivia's external debt

CAF President & CEO Enrique García announced that the Board had approved CAF participation in the Heavily Indebted Poor Countries Debt Reduction Initiative – HIPC whose objective is to help these nations in their efforts to improve their profile with the international community.

The direct contributions from CAF – combined with grants from industrialized countries – will cover the Corporation’s share of US$39.1 million under the methodology of this multilateral initiative.

The HIPC is a commitment of the international financial community, led by the World Bank and the International Monetary Fund, to reduce the present net value of the sovereign debt with bilateral and multilateral organizations of relatively less developed countries, which meet the very strict methodological criteria established by these organizations,

Bolivia, together with a select group of countries, meets the criteria for accessing the HIPC initiative given its track record of success in the area of macroeconomic stability reforms over 12 years, in addition to positive and responsible management of its external debt, eliminating its commercial debt with private banks and successively restructuring its public debt with the Club of Paris.

In this respect, García said execution of the program was important for the long-term backing of the growth of Bolivia, and contributing to its participation – at private and public level – on international capital markets, as demonstrated by the recent B1 and BB ratings assigned to the country by Moody's and Standard & Poor's, respectively.

The launch of the HIPC for this Andean country will reduce the balance of its external public debt by US$448 million in net present value, to which bilateral institutions will contribute approximately US$157 million with US$291 million from multilateral organizations.