How the C2D came about
In 1996, the international community recognized that the external debt situation of a number of very poor countries had become “unsustainable” and had a negative impact on their development prospects. The “Heavily Indebted Poor Countries” (HIPC) initiative was launched in the same year and is coordinated by the Paris Club creditors. It aims to reduce the external debt burden of these countries to a sustainable level.
When the last stage of the HIPC process – completion point – is achieved, the French State may make an additional bilateral effort in the form of a Debt Reduction-Development Contract (C2D).