On 13 July 2026, the Federal Government of Somalia and the Kingdom of Spain signed two landmark agreements in Madrid: a Debt Reduction Bilateral Agreement and a Debt Swap Programme Agreement. With this signature, Spain becomes the last Paris Club creditor with whom Somalia has concluded a bilateral debt relief agreement, a deeply significant achievement in Somalia's HIPC debt relief process following the country's attainment of the HIPC Completion Point in December 2023.
The ALSF has supported the Government of Somalia throughout this process since 2020, when it first supported Somalia's Paris Club negotiations that resulted in the cancellation of USD 1.4 billion of Paris Club debt. Building on two successive advisory projects, the ALSF has continued to provide comprehensive legal, financial, and strategic advisory assistance across various workstreams, including the negotiation of these agreements with Spain.
Under the agreements, a substantial portion of Somalia's outstanding debt to Spain will be cancelled, with the remaining amount being channelled through a Debt Swap Programme to finance priority development projects for the Somali population, notably in the education and health sectors.
This milestone reflects the Government of Somalia's continued commitment to strengthening its public finances and advancing long-term economic development, as well as the ALSF's sustained commitment to supporting African governments in complex sovereign finance transactions.
We extend our sincere appreciation to ALSF advisors @KeplerKarst and @GSA for their excellent collaboration throughout this transaction.
The ALSF's support is aligned with its mission to provide transactional support to African governments in structuring and negotiating complex agreements in the energy, PPPs, natural resources, and sovereign finance sectors, in an effort to ensure fair and sustainable agreements that advance development across the continent.
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