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Export Credits Guarantee Department: Finance

Volume 470: debated on Thursday 24 January 2008

To ask the Secretary of State for International Development how much his Department contributed to the Export Credits Guarantee Department in 2005-06 to compensate it for claims abandoned in 2005-06. (180326)

[holding answer 21 January 2008]: DFID paid £643,000 to the Export Credit Guarantee Department (ECGD) in 2005-06. These payments represent amounts due from countries receiving debt relief under the Heavily Indebted Poor Countries (HIPC) Initiative.

Countries qualify for debt relief under the HIPC Initiative in two stages: first, they qualify for interim relief from debt service payments due. Later, when countries complete the Initiative, they receive irrevocable debt cancellation.

Debts owed to official creditors, such as ECGD, are dealt with by the Paris Club. ECGD implements decisions taken at the Paris Club, providing debt relief at the levels agreed. In 2005-06, ECGD provided over £1.5 billion of debt relief. DFID meets the costs of additional relief over and above what has been agreed by the Paris Club so that HIPCs receive 100 per cent. debt relief. It is UK policy to provide 100 per cent. debt relief to HIPCs, from the time countries first qualify for the Initiative.