African Development Bank (ABD) yesterday said it has approved a debt relief amounting to US$363.62 million to support poverty eradication in Tanzania, Ethiopia and Mozambique.

Tanzania will receive US$124.90 million, Ethiopia US$216.47 million and Mozambique US$22.25 under the enhanced Heavily Indebted Poor Countries (HIPC) initiative.

The bank said in a statement that with the debt relief the three countries will be released from up to 80 per cent of their annual debt service obligations to ADB, hence more resources will be available for poverty eradication.

It said removal of the debt overhang will, among others, enhance prospects of economic growth, restore confidence of investors and facilitate greater private sector capital inflows to the countries.

The HIPC initiative was set up in 1996 and enhanced in 1999 to offer assistance to reduce the external debt of countries facing unsustainable debt obligations after full use of existing debt relief mechanisms.

ADB said it had approved a debt relief amounting to US$190.75 million, representing US$124.90 million in 1999 net present value (NPV) terms to Tanzania, which reached its point under the enhanced HIPC initiative in November 2001.

In nominal terms, ADB's assistance to Tanzania under the enhanced HIPC initiative amounts to US$190.75 million.

Bank group debt relief to Tanzania during the interim period, April 2000 to November 2001 amounted to US$13.11 million in nominal terms.

ABD said it also had approved a debt relief totalling US$216.47 million in June 2001 NPV terms to Ethiopia.

which reached its decision point in November last year under the HIPC initiative.

The bank said it also had approved debt relief amounting to US$22.25 million in end-1998 NPV terms June 2001 to Mozambique, which reached its completion point under the enhanced HIPC initiative in September 2001.

Out of this amount, US$18.80 million in 1998 NPV terms were approved in October 2000 when Mozambique reached its decision point.