Cologne Conditions

The Cologne Conditions promote concessional debt reduction agreed by the Paris Club in 1999 as part of the strengthened Heavily Indebted Poor Countries (HIPC) Initiative. Under these conditions, the Paris Club creditors agree to a reduction in the net present value of the debt – in each individual case – of up to 90% of the previous commercial debt (other than Official Development Assistance (ODA)). at the cut-off date, or a further reduction if necessary for an equitable sharing of the burden (once traditional debt relief mechanisms have been applied) with multilateral creditors to achieve debt sustainability for a given country.