Definition: Heavily Indebted Poor Countries Initiative
The Heavily Indebted Poor Countries Initiative (HIPC Initiative), adopted in 1996, provides exceptional assistance to eligible countries to reduce their external debt burdens to sustainable levels, thereby enabling them to service their external debt without the need for further debt relief and without compromising growth. It is a comprehensive approach to debt relief which involves multilateral, Paris Club, and other official and bilateral creditors. To be eligible, countries must (1) have established a strong track record of performance under programs supported under the Poverty Reduction and Growth Facility (PRGF) and the International Development Association (IDA); (2) be IDA-only and PRGF-eligible; (3) face an unsustainable debt burden; and (4) have developed a Poverty Reduction Strategy Paper. A strong track record of policy implementation is intended to ensure that debt relief is put to effective use.
International Monetary Fund (IMF), "Online glossary of selected financial terms" (as per March 15th, 2008), International Monetary Fund, Washington D.C., 2008