Governments of R. of Moldova and Japan signed a bilateral agreement concerning restructuring debts of R. of Moldova

Governments of the R. of Moldova and Japan signed in Chisinau a Bilateral Agreement on restructuring some of the R. Moldova’s debts, totaling JPY 1.82 bln (USD 15.4mln). The document has been signed by the minister of Finances, Mihail Pop, and the Ambassador of Japan to the R. of Moldova, residing in Kiev, Mutsuo Mabuchi. The agreement provides debt restructuring till 2022. It has been signed in conformity with the provisions of the Protocol on Moldova’s external debt restructuring, signed on May 12, 2006 within the frameworks of the Paris Club. According to the website of the Ministry of Finances, the fact of signing this Protocol, would make it possible to reduce the expenses related to the payment of the debt for the creditors of the Paris Club from USD 149.9 mln to about 60 mln, during the implementation of the Program with the International Monetary Fund. On May 12, 2006, the Paris Club creditors agreed with the Government of the R. of Moldova upon restructuring its external debt. This agreement has been made after the approval on May 5 2006 of the arrangement with RM within the frameworks of the Poverty Reduction and Economic Growth Mechanism by the IMF’s board of directors. The agreement consolidates the non-reimbursable debt of about USD 150 mln contracted by the R. of Moldova till December 31, 2000. This sum is formed of arrears (USD 68 mln, including the unpaid interest) with the maturity expired on April 30, 2006 and loans due in the period from May 1, 2006 to December 31, 2008 (USD 81.8mln). Restructuring the expiring loans is in conformity with the so-called “Houston terms”: repayment of ODA debts will be operated during 20 years with a 10-year grace period; repayment of commercial credits will be made during 15 years with a 5-year grace, and the repayment of the other 70% of the debts will be operated during the 3-year period. In conformity with the Agreement signed at the Paris Club, bilateral agreements were to be signed with each creditor, including USA (USD 20.643 mln), Russia (USD 89,963 mln) Germany (USD 21.959 mln), Japan (USD 16.252 mln), and Italy (USD 1.078 mln). In the first half of November, Vice Prime Minister Zinaida Grecianii declared that the bilateral agreement with Russia has already been signed. In March, the debt of the R. of Moldova for the Paris Club creditors topped USD 276 mln.