The United Nations agency tasked with reducing rural poverty announced today that it has approved a debt-relief package for disaster-stricken Haiti in a bid to help the country get back on its feet after the calamitous earthquake that struck the Caribbean island nation in January.
“The agreement provides the basis for permanent debt forgiveness of Haiti’s debt burden to our organization,” said Kanayo Nwanze, President of the International Fund for Agricultural Development (IFAD).
The net present value of Haiti’s debt to IFAD is $50.7 million. Under the agreement to write off the debt, approved this week by the fund’s executive board, IFAD will contribute up to 30 per cent of the debt relief requirement, with Member States needing to contribute the remaining 70 per cent.
“Without this type of relief, Haiti would have been hard pressed to repay its outstanding loans to the organization, to the detriment of the critical reconstruction and development activities. With the generous contributions from our members – plus a significant investment on our part – we are breaking that cycle,” said Mr. Nwanze.
IFAD responded rapidly to the January earthquake with a $2.5 million grant for irrigation and watershed rehabilitation in a project that is expected to benefit some 12,000 households in rural areas directly affected by the earthquake.
“A small portion of Haiti’s debt was already forgiven by organizations like IFAD under the Highly Indebted Poor Countries Debt Initiative, but the bulk remained,” said Josefina Stubbs, director of IFAD’s Latin America and the Caribbean division.
“By relieving the country of this burden, we are freeing up funds for redevelopment and reconstruction,” he added.
IFAD is an international financial institution and a specialized UN agency dedicated to eradicating poverty and hunger in rural areas of developing countries.