PARIS–France is prepared to grant a bridging loan of up to $1.5 billion to clear Sudan’s arrears to the International Monetary Fund and bring the country a step closer to securing relief on much of its debt, a French diplomat said on Wednesday.
Sudan hopes to qualify for the Highly Indebted Poor Countries (HIPC) debt relief initiative in June as its transitional civilian government battles a crippling economic crisis.
It is seeking relief on at least $50 billion in external debt to international financial institutions, official bilateral creditors and commercial creditors. The African nation has already secured bridging loans from the United States and Britain to clear arrears to the World Bank and African Development Bank. About 85% of the debt is in arrears.
France is Sudan’s second biggest bilateral creditor after Kuwait, according to IMF data and is due to host an economic conference on Sudan next month.
“We are quite optimistic, France is ready to grant a bridging loan of $1.3, $1.4, $1.5 billion – whatever will be needed for the reimbursement of the IMF,” Ambassador Jean-Michel Dumond, France’s special envoy to Sudan and South Sudan, told a virtual panel hosted by Chatham House.
“Sudanese debt is more than the $56, $57 billion officially registered, it is something around between $60 and $70 billion,” Dumond said, adding that the Paris conference would register commitments for debt relief but not make a final decision.
Sudan is emerging from decades of economic sanctions and isolation under former President Omar al-Bashir, who was ousted by the military after months of popular protests in April 2019.
The military and civilian groups are sharing power under a transitional arrangement due to last until the end of 2023.
The United States and the IMF earlier this month urged other governments to join in the effort to provide debt relief to crisis-hit Sudan.
The US Treasury held a roundtable with 20 countries to advance Sudan’s efforts to secure relief on $50 billion in foreign debt under the HIPC initiative, created by the International Monetary Fund and World Bank.
Treasury official Andy Baukol highlighted “the progress Sudan’s civilian-led transitional government has made in implementing macroeconomic reforms,” according to a Treasury readout of the meeting.
Gebril Ibrahim, Sudan’s Minister of Finance and Economic Planning, attended the roundtable along with representatives the IMF, World Bank, African Development Bank and Paris Club of official creditors, US Treasury said.
In late March, Washington approved more than $1 billion bridge financing to Sudan to help clear arrears at the World Bank to allow the country to qualify for the HIPC initiative.