January 19, 2006	Thursday	Zilhaj 18, 1426

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ISLAMABAD, Jan 18 : Germany will write off $128 million of Pakistan’s debt to facilitate reconstruction efforts after the earthquake, says a press release issued here by the German embassy.

The new debt relief package comes in addition to more than $120 million already committed by Germany to relief and recovery projects in Pakistan.

Two agreements were signed between Pakistan and the German Development Bank (KfW). Under each agreement, debt in the amount of $31 million will be cancelled under the condition that Islamabad contributes an equivalent of $15.5 million in local currency to each of the debt-for-development-swaps for additional investments in the education sector.

Jutta Burghardt, head of the Department for International Development Co-operation at the German embassy said: “The first rescheduling of debt-for-education aims at improving the standard of education in the middle schools of Punjab.”

Funds would be utilized for the establishment and capacity building of middle schools libraries through provision of supplementary reading, reference materials; and modern teaching aids, Mrs Burghardt said.

The second focuses at improving the learning environment in the middle schools of the NWFP. Funds would be allocated to upgrade selected primary schools to middle level; to rehabilitate classrooms by providing basic facilities especially to the middle schools for girls.

The debt cancellation deal comes as part of recent negotiations between Germany Development Assistance. Implemented by technical cooperation for training and capacity building through the GTZ, German Technical Cooperation.

As a second step, the German government suggested debt-for-development-swaps amounting to another $66.5 million of debt cancellation. Further swaps will also be aimed at reconstruction efforts in the affected areas. Negotiations on the specifics will start soon.