Paris Club creditors agree to cancel 100% of Afghanistan's debt

By Marisa Wong

Milwaukee, March 17 - Paris Club creditors and the Islamic Republic of Afghanistan agreed to a debt cancellation on Wednesday, according to a press release.

The agreement follows Afghanistan reaching its completion point under the enhanced initiative for Heavily Indebted Poor Countries on Jan. 27.

The canceled debt totals $441 million, which represents the Paris Club's share of the effort in the framework of the enhanced HIPC initiative.

The Paris Club creditors said that they support Afghanistan's commitment to seek comparable treatment from all their other external creditors. The creditors also committed on a bilateral and voluntary basis to cancel an additional $585 million, which would amount to 100% debt relief.

Afghanistan has committed to allocate the resources freed by the present debt relief to priority areas identified in the country's poverty reduction strategy.

Formed in 1956, Paris Club is an informal group of creditor governments from major industrialized countries.

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