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Cablegate: Belgium to Cancel Nearly Usd 400 Million in Drc

VZCZCXRO7488
PP RUEHBZ RUEHDU RUEHGI RUEHJO RUEHMR RUEHRN
DE RUEHKI #1632 2961553
ZNR UUUUU ZZH
P 231553Z OCT 06
FM AMEMBASSY KINSHASA
TO RUEHC/SECSTATE WASHDC PRIORITY 5018
INFO RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RUEHXR/RWANDA COLLECTIVE
RUCNSAD/SOUTHERN AFRICAN DEVELOPMENT COMMUNITY

UNCLAS KINSHASA 001632

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: EFIN ECON EAID PGOV CG
SUBJECT: BELGIUM TO CANCEL NEARLY USD 400 MILLION IN DRC
DEBT

REF: KINSHASA 1608

1. (U) The Government of Belgium (GOB) announced October 17
that upon the GDRC's achievement of the Highly Indebted Poor
Countries (HIPC) completion point, it will cancel all
remaining sovereign DRC debt. (Note: As noted in reftel,
completion point will be no earlier than the fourth quarter
of 2007 (reftel). End note.) The amount remaining due at the
completion point will be about USD 300 million, although the
GOB's cost to annul this debt will be only about four percent
of its book value.

2. (U) The DRC's debt to Belgium consisted initially of a
total of USD 1 billion in loans, accrued through 1997, both
during the pre-1960 colonial era and the Mobutu-era. The GOB
reduced this amount to USD 300 million during a debt
restructuring process in 2002-2003. The DRC's total estimated
external sovereign debt is around USD 9-10 billion.

3. (U) Prior to achievement of the HIPC completion point, the
GOB will cancel an additional USD 94 million in loans made to
the GDRC in 1997 and before, pursuant to a June 2006
agreement between the two countries' Central Banks.
EconCouns told EconOffs that the GOB basically wrote-off this
amount years ago as bad debt and that the cancellation now is
essentially an administrative act from the GOB's perspective.
MEECE

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