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World Bank Reschedules
Bosnia’s Debt
Complex plan will increase lending,
By Rich Miller
WASHINGTON (Reuters) - The World Bank Thursday paved the way for stepped-up lending to Bosnia by approving a complicated plan to clear the country's debt arrears. The move by the Bank's board came as ministers from more than 40 nations met in Florence, Italy, to review the faltering peace process in Bosnia and discuss the rebuilding of the country after 43 months of war.
The Bank has already committed to lend Bosnia $150 million under a special trust fund that it set up for the country in February. But the lending agency has been prevented from doing more until Bosnia cleared the more than $450 million in overdue principal and interest payments owed the Bank on loans made to the former Yugoslavia.
Under the plan approved on Thursday, the Bank agreed to effectively reschedule those payments by consolidating them in a series of new loans, Bank officials said. The new loans, totaling up to $650 million, will also be used to help Bosnia pre-pay some of its other debts to the Bank that were accumulated by Yugoslavia when interest rates were much higher than they are now.
Bank officials said Thursday's action means that Bosnia can become a full-fledged member of the lending organization, making it eligible for significantly more assistance. Much of that help, at least in the early stages, is expected to come from the International Development Association, a World Bank affiliate that lends money to the world's poorest countries at no interest charge.
The Bank has estimated that Bosnia will need $5.1 billion in international assistance over the next three to four years to help rebuild its shattered economy. The lending agency is expected to provide roughly 20 to 25 percent of that.
Donors have already pledged some $1.8 billion in help for Bosnia this year. The Bank's share of that could total roughly $450 million, including the $150 million already committed from the special trust fund.
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Berserkistan, June 13 · Time to Pay Up, World Bank tells Donor Nations
Bosnian Reconstruction at a Glance The World Bank
The World Bank The World Bank’s Homepage
Bosnian/Balkan Reconstruction U.S. Department of Commerce
Bosnian Reconstruction Guide Republic of Bosnia and Herzegovina
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