April 11, 2012 / 5:39 PM / 8 years ago

Paris Club agrees $344 mln debt relief for Guinea

PARIS (Reuters) - The Paris club of creditor governments agreed on Wednesday to provide $344 million in debt relief to Guinea, including more than $151 million in debt cancellation, the group said in statement.

In addition to standard Paris Club relief terms for poor countries, the creditors agreed to defer or reschedule debt repayments over an eight-year period on some of the country’s debt and defer interest on amounts treated, the statement said.

“Participating creditors noted that following the crisis that the Republic of Guinea has gone through, the government has quickly revived economic activity and resumed negotiations with the Paris Club,” it said.

After years of military leadership, the West African nation began a transition to civilian rule in late 2010 after the first free polls since independence from France.

Guinea is the world’s largest supplier of the aluminium ore bauxite and has vast deposits of iron ore that have drawn billions of dollars in planned investments, but it is struggling to emerge from decades of political turmoil.

The Club said that Guinea’s government was convincingly implementing a reform programme, which could lead to final round of debt relief with its Paris Club creditors.

Guinea had more than $750 million in debt owed to Paris Club members at the start of the year in nominal terms.

The agreement with the Paris Club came after the International Monetary Fund said last month that the country had taken necessary measures to qualify for debt cancellation.

The Club said that Guinea’s government had committed to use the money freed up by its debt relief in a poverty reduction programme.

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