SRI LANKA and Indonesia, devastated by the tsunami disaster in late December, have been given a moratorium until December 31 on repayment of their debt owed to Paris Club members, the Paris Club said Thursday.

Debt repayments will be rescheduled over five years, the so-called Paris Club of creditor nations said yesterday.

The decision was made Wednesday after the Club received an assessment from the International Monetary Fund and the World Bank on the needs of Indonesia and Sri Lanka in the wake of the December 26 tsunami, the Club said in a statement.

The Club recalled its announcement after a January 12 meeting that, in view of the effects of the tsunami and "to allow those countries affected to dedicate all resources to address humanitarian and reconstruction needs," it did not expect any debt payment from tsunami-affected countries until the IMF and the World Bank had made a full assessment of needs.

"On the basis of the analysis of the situation made by the IMF and the World Bank, and for debtor countries that have declared their interest, Paris Club Creditors, consistent with the national laws of the creditor countries, have agreed not to expect any debt payment on eligible sovereign claims from those countries until December 31, 2005," the statement said.

"They offer that the deferred amounts be repaid over five years of which one year of grace," it said.

Indonesia and Sri Lanka, the only two tsunami-struck countries that have shown an interest in the Paris Club proposal, will resume repayment of the debt to Paris Club creditors in early 2006, with the payment due for 2005 to be paid over four years, from 2007.

"Paris Club creditors expect that the resources freed by this measure will benefit directly the people affected by the tsunami," the Club said. A Paris Club official said the initial amounts owed by the two countries was a combined 3.8 billion dollars (2.83 billion euros). He did not provide specific figures for each country. - AFP