2011年-IMF国际货币组织全球_Burundi_Request_for_Modification_of_Nonconcessional_External_Debt_Limit_Under_the_Extended_Credit_Facility_14页_450kb

Burundi: Request for Modification of Nonconcessional External Debt Limit Under the Extended Credit Facility

Core Content

This document outlines the request by the Burundian authorities to the IMF for the modification of the zero limit on nonconcessional external debt under the Extended Credit Facility (ECF). The modification is necessary to accommodate a US$80 million line of credit from the Export Import Bank of India for the Kabu 16 hydroelectric plant, which has a grant element of 31.6%, below the 50% threshold for concessional financing.

Main Points

• Request Context: The Burundian government has requested a modification to the ECF's nonconcessional external debt limit to allow for the Kabu 16 hydroelectric project financing.
• Project Details: The Kabu 16 hydroelectric plant is expected to increase Burundi's electricity generation capacity by 36%, which is a major constraint to growth. The project is economically viable according to the World Bank.
• Grant Element Issue: The line of credit has a grant element of 31.6%, which is below the 50% threshold required for concessional financing. The authorities have tried to increase the grant element but were unsuccessful.
• Donor Responses: The African Development Bank, World Bank, and European Union could not provide additional grants to meet the 50% grant element requirement.
• Debt Sustainability: The IMF staff conducted a debt sustainability analysis and found that the proposed modification would result in an initial increase in the external debt-to-exports ratio and debt service-to-exports ratio, but not a significant and persistent increase in debt vulnerabilities.
• Support for Modification: The staff supports the modification, as the benefits of the hydroelectric plant outweigh the additional risk. The project is considered essential for growth, especially given Burundi's high risk of debt distress.
• Safeguards: The Technical Memorandum of Understanding (TMU) will be modified to include the electricity company (REGIDESO) in the coverage of new nonconcessional external debt to ensure close monitoring of potential fiscal liabilities.
• Reforms in Place: REGIDESO is implementing reforms to strengthen financial management, including cost recovery measures, tariff adjustments, fuel cost pass-through mechanisms, and increased revenue base through pre-paid cards and metering systems.

Key Information

• Grant Element: The current line of credit has a grant element of 31.6%, which is not concessional. The authorities aimed for a 50% grant element but failed to secure it.
• Debt Impact: The debt-to-exports and debt service-to-exports ratios would increase initially but remain within manageable levels.
• Electricity Sector Reforms: REGIDESO is implementing measures to improve financial operations, including tariff adjustments, cost recovery, and revenue base expansion.
• Debt Sustainability Framework: The analysis shows that all external indicators would remain below indicative thresholds, and the capacity to repay the Fund would not be materially affected.
• Project Importance: The Kabu 16 hydroelectric plant is seen as a critical infrastructure project for economic growth, especially given the narrow export base and high risk of debt distress in Burundi.
• Sensitivity Analysis: Various scenarios and bound tests were conducted to assess the impact of the proposed modification on key indicators. The results show that while there are variations, the overall debt sustainability remains robust.

Key Tables and Figures

• Table 1: External Debt Sustainability Framework, Baseline Scenario, 2007–30. Includes data on external debt, debt service, and other macroeconomic indicators.
• Table 2a and 2b: Sensitivity Analysis for Key Indicators of Public and Publicly Guaranteed External Debt, 2010–30. Covers alternative scenarios and bound tests for various debt metrics.
• Figures 1 and 2: Indicators of public and publicly guaranteed external debt for the period 2011–30, showing the projected changes in debt-to-GDP, debt-to-exports, and debt service ratios.

Conclusion

The IMF staff supports the modification of the nonconcessional external debt limit to allow for the Kabu 16 hydroelectric project financing. This is due to the project's significant economic benefits and the lack of alternative concessional financing. The modification includes safeguards to monitor fiscal liabilities from the electricity sector and ensure continued debt sustainability.