Naples Terms

Naples Terms

A form of debt relief for heavily indebted poor countries in which the present value of payments is reduced by up to two-thirds. The Naples terms were introduced by the Paris Club in 1995. This form of debt relief is a type of concessional restructuring.
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What we have now has been given assurances to expect by the Paris Club is that Nigeria will clear its arrears of $6 billion of the $30 billion owed, following which there will be a stock reduction on Naples Terms while we will have to buy back the remainder.
Contents Introduction Background Paris Club Terms Classic Terms Houston Terms Naples Terms Cologne Terms The Evian Approach U.S.
They are, in increasing degree of concessionality: Classic Terms, the standard terms available to any country eligible for Paris Club relief; Houston Terms, for highly-indebted lower to middle-income countries; Naples Terms, for highly-indebted poor countries; and Cologne Terms, for countries eligible for the IMF and World Bank's Highly Indebted Poor Countries Initiative (HIPC).
Naples Terms, designed at the December 1994 G-7 meeting in Naples, Italy, are the Paris Club's terms for cancelling and rescheduling the debts of very poor countries.
(7) They allow for higher levels of debt cancellation than Naples Terms. Under Cologne terms, 90% of eligible debts can be cancelled.
It urges the Paris Club of debtors to the developing world to consider reworking the debt arrangements, adding that "a first step would be to consider the eligibility of Honduras for the so-called Naples terms", which would allow the debt to be rescheduled.