The International Monetary Fund (IMF) executive board approved on Monday a financing plan to help mobilize resources needed for the fund to cover its share of debt relief to Sudan.
The financing plan relies on a broad effort of IMF member countries, including cash grants and contributions derived from the fund’s internal resources, IMF Managing Director Kristalina Georgieva said in a statement.
“This marks a critical step in helping Sudan advance the process of normalizing relations with the international community and make progress towards achieving debt relief under the Heavily-Indebted Poor Country (HIPC) Initiative,” she added.
The IMF said on Friday it had reached a staff-level agreement with Sudan on completion of the second and final review under its staff-monitored program, in a step towards debt relief.
A strong performance under the year-long IMF economic reform program is a requirement for Sudan to reach the “decision point” for debt relief under the HIPC process. Sudan is expected to reach that point in June.
In April, a French diplomat said France was prepared to grant a bridge loan of up to $1.5 billion to clear Sudan’s arrears to the IMF and bring the country a step closer to securing relief on much of its debt.
Sudan, whose transitional civilian government is battling a crippling economic crisis, 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 bridge 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.
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.