France cancels Malawi’s €11 million debt

France has wiped off Malawi’s remaining debt with the unpaid money to be re-directed towards a jointly funded mining based development project, that country’s new ambassador to Malawi has announced.

Marie Annick Boudin said the move is part of a Highly Indebted Poor Countries (HIPC) initiative and the total debt cancelled by the French amount to €10.82 million (approximately K4.3 billion).

The move follows the meeting Boudin had with President Joyce Banda on Monday where she gave her letters of credence.

“We have discussed the matter with the president and we can confirm that we have cancelled the debt and the money will be used to fund a mining project which will be jointly run by the two countries,” said Boudin.

She said the move was in line with that country’s realignment of sector of corporation.

According to the ambassador, the K4.3 billion will be turned into a financing framework and would be directed towards the financing of the yet to be identified project.

The two countries are yet to agree on the overall terms and conditions on which the grant will be disbursed for the implementation of the project.

However, Boudin said the French government was impressed by Malawi government’s commitment to make economic reforms and pledged to support initiatives to help the country develop.

She said France was also impressed by Malawi’s peacekeeping role on the continent including the dispatching of its military peacekeeping contingent in France’s former colony Ivory Coast.

She said her country hence was considering ways of helping the country in this regard and other areas of bilateral agreement.

While describing the debt relief as a good development for the mining sector, Minister of Energy and Mining Cassim Chilumpha said he was yet to be furnished with details about the agreement.

“It’s a very good development for the mining sector. We need the boast but let me get the details first before committing to further comment,” he said.

President Banda also received new ambassadors from Mozambique and Italy on Monday.