ISLAMABAD: Japan and Pakistan on Tuesday agreed on debt deferral amounting to $370 million (40 billion yen) for making fiscal space to fight against Covid-19 in the country.

Under the agreement signed in Islamabad, repayments for the debt and interest due between May 1, 2020 and Dec 31, 2020 will be rescheduled after June 15, 2022. This is in line with the G20 Debt Service Sus­pension Initiative (DSSI) agreed on April 15, 2020. A memorandum of understanding was signed between Pakistan and the creditor countries on June 9, 2020. Notes to this effect were signed and exchanged between Am­­bassador of Japan, Matsuda Kuninori, and Secretary Economic Affairs Division, Noor Ahmed.

The concessional loans, which are subject to the debt deferral, have been utilised for infrastructure development such as roads, tunnels, power plants and grids, irrigation, water supply, drainage facilities in Pakistan from the early 1990s to the mid-2010s.­

Published in Dawn, April 28th, 2021

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