CONFIDENTIAL
But
SAF/ESAF, SPA and Toronto terms provide inducements to persist with
adjustment.
Enhanced Structural Adjustment Facility
11. The ESAF was set up in 1988 as a follow up to the Structural Adjustment
Facility (SAF), with the same terms and conditions as the SAF • a three
year
programme; lending at 0.5 per cent; and maturity of ten years with 5 years
Whereas SAF was funded through the
SDA
grace. The difference was in funding.
account (the result of the 1978 gold sale) ESAF was funded by a trust making
concessional loans to 62 IDA eligible low-income countries, 34 in SSA and 28 elsewhere (including Pakistan and Bangladesh. India and China are eligible, but
volunteered not to draw.)
12.
a
The ESAF Trust works as follows. Creditor members either make loans (up to
target aggregate of SDR 6 bn/$7.8 bn) to provide the capital used for lending,
the difference betweer. or grants (target aggregate SDR 3,300 m/$4.3m), to meet the rate paid to the creditors and the highly concessional rate paid by debtors. The loans are to be serviced at the SDR rate of remuneration (ie rate of interest
paid to creditors) or are at concessional rates.
13.
Contributions, however, remain some way short of target.
Major contributors
are (31 January 1990):
SDR million
Grants or Grant Equivalents
Loans
UK
414
Japan
319
2200
France
380
800
Germany
130
700
Italy
201
370
Canada
163
300
Saudi Arabia
109
200
US (not yet approved by Congress)
105
(others)
716
746
Total Target
2537
5316*
3300
6000*
* unchanged since last year.
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