ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet is expected to allow on Tuesday (today) the signing of $232 million worth of debt relief pacts with 10 members of the G20 countries and Rs8.3 billion worth of Ramazan relief package.

To be presided over by Finance Minister Shaukat Tarin, the ECC meeting will take up a seven-point agenda, including the approval of a letter of comfort and re-issuance of an existing bank guarantee to Faysal Bank Ltd for a new financing agreement for Pipeline Infrastructure Deve­lopment Project LNG-II.

Although not on the agenda, the ECC may also take up a summary on the creation of a revolving fund for payments to Chinese independent power producers (IPPs).

The meeting is also expected to approve a supplementary grant of Rs3.5bn for the launch of the Pak University of Engineering and Emerging Technologies (PUEET) in Prime Minister House.

Informed sources said the ECC would approve the signing of financing agreements with 10 countries under the Debt Services Suspension Initiatives (DSSI) announced by the G20 nations in 2020 at the request of the International Monetary Fund (IMF) and the World Bank.

The agreements to be approved by the ECC would include a total of $232 million in debt relief. These pertain to Italy, Japan, the United Kingdom, Austria, France, South Korea, the Netherlands, Switzerland, Sweden and Saudi Arabia.

These loans were due for payment in 2020 and 2021 under the original loan agreements but were suspended by G20 under the DSSI to support poor countries weather tough financial conditions following a global economic slowdown led by the Covid-19 pandemic.

The amount will now be repaid over a period of six years, starting from 2022. The total amount of Pakistan’s external debt that has been suspended and rescheduled under the DSSI framework, covering the period from May 2020 to December 2021, is about $3.688bn.

Pakistan has already signed 80 agreements with 21 bilateral creditors for the rescheduling of its debts under the G20 DSSI framework, amounting to the rescheduling of $2.934bn.

Pakistan’s total debt payable to 11 of the G20 nations stands at about $20.7bn under 155 loans. Pakistan does not have any loan from the other nine members.

Ramazan package

The sources said the ECC would formally approve a discount of five to 15 per cent on 19 kitchen items to be sold through Utility Stores Corporation’s outlets during the holy month of Ramazan. The government has already approved an allocation of Rs8.28bn for the Ramazan Relief Package.

The cabinet committee is also expected to approve a supplementary grant to Pakistan Military Accounts for converting defence pensioners to Direct Credit System. It will also approve the allocation of Oil and Gas Development Company’s Jhal Magsi gas to Sui Southern Gas Company Ltd (SSGC) and Mari (deep) gas to Sui Northern Gas Pipelines Ltd (SNGPL).

Faysal Bank

The ECC would also consider issuing a letter of comfort and re-issuance of the existing bank guarantee to Faysal Bank Ltd (FBL) as an investment agent for a new financing agreement for the LNG-II pipeline already under implementation.

As part of a joint consortium, the bank earlier led two (one conventional and another Islamic) financing arrangements for the same project worth Rs16.7bn and Rs15bn for the same pipeline.

Published in Dawn, March 15th, 2022

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