The Inter-American Development Bank (IADB) said Friday it had approved 4.39 billion U.S. dollars of debt forgiveness for Bolivia, Guyana, Haiti, Honduras and Nicaragua, according to news reaching here from Guatemala.

The bank will use the Special Operations Fund to cancel this debt, IADB President, Colombia's Luis Alberto Moreno said, calling the move a great opportunity for the nations to use the freed cash for social projects.

All 47 governors from the member nations voted to forgive the debt, which represents 3.37 billion dollars in principle payments and 1.017 billion in interest.

The board also voted to allow Ecuador, El Salvador, Guatemala, Paraguay and Suriname access to a cheap loans program, worth up to 250 million dollars a year.

The debts forgiven are: Honduras, 1.367 billion; Bolivia, 1 billion; Nicaragua, 984 million; and Guyana, 467 million. These are all backdated to January this year, when they completed the terms for the Highly Indebted Poor Countries program.

The bank forgave only 20 million of Haiti's debt, as it had not completed all conditions. If it completes the remaining conditions by 2009, the bank will eliminate a further 525 million.

If all goes well in Haiti, the bank will give the Caribbean island nation 50 million dollars between 2009 and 2010, and from 2010 onwards will begin lending again on very lenient terms.

The IADB also restated its commitment to helping the countries in the region reach the millennium development goals, including halving total poverty by 2015.

Source: Xinhua