Paris Club creditors said on Friday they had agreed to a restructuring of about $420 million (494 million euros) of Yemen's public external debt and cancel obligations of about $25 million.
"Given the high level of external indebtness of Yemen, this agreement consolidates part of the stock debt of Yemen in order to reach a sustainable indebtness level," the Paris Club, made up of creditor governments from major industrialized countries, said in a statement.
The rescheduling covered about $420 million of pre cut-off date debt.
"This relief will lead to the immediate cancellation by Paris Club creditors of about $25 million of Yemen's external debt," the group said.
"These measures are also expected to reduce debt service due to Paris Club creditors in 2001 and 2002 from $125 million to $96 million."
Under the agreement, pre-cut off date Official Development Assistance (ODA) credits are to be repaid over 40 years, with 16 years grace at interest rates at least as favourable as the original concessional rates applying to the loans, the Paris Club said.
Yemeni debts to the Paris Club were estimated to be $1.9 billion at the end of 2000. About $1.85 billion of this was pre cut off date debt, of which 24 percent was ODA, the organization said. — (AFP)
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