By Rachel Savage
JOHANNESBURG (Reuters) – Chad’s official bilateral creditors will make up any shortfall in commitments from its private lenders to a plan to cut the country’s debt servicing costs if those costs become unmanageable, the International Monetary Fund (IMF) said.
The official creditors – China, France, Saudi Arabia and India – are expected to sign a Memorandum of Understanding on a debt agreement for the oil-rich, central African nation in coming days, the IMF said in a report released late on Thursday.
In November Chad reached an agreement, first reported by Reuters, with creditors also including Swiss commodities trader Glencore, paving the way for more IMF funding but stopping short of reducing the country’s $2.9 billion in external debt.
Under that deal, the first reached under the Group of 20 leading economies’ Common Framework restructuring process, creditors agreed to reconvene to discuss debt relief if oil prices fell far enough to make Chad’s debts unmanageable.
Should private creditor contributions to such an arrangement not bring Chad’s debt servicing costs to below 14% of state revenues, “official creditors will contribute (more) in proportion of the debt service due to each official bilateral creditor,” the IMF report said.
In 2021, Glencore and other private creditors baulked at signing up to an earlier debt relief plan when oil prices rose.
Thursday’s IMF report also confirmed a Reuters report that Glencore had agreed to reprofile part of Chad’s oil-linked debt due in 2024.
Chad’s official creditors will meet “well before end-2024” to address debt relief for 2025-2028 if the need arises, the IMF added.
(Reporting by Rachel Savage; editing by John Stonestreet)
