Pakistan signs pact with France for $107m debt suspension

Published June 27, 2022
Secretary of the Ministry of Economic Affairs Mian Asad Hayaud Din signs a debt suspension agreement with French Ambassador Nicolas Galey in Islamabad, Monday. — Economic Affairs Division, Government of Pakistan Twitter
Secretary of the Ministry of Economic Affairs Mian Asad Hayaud Din signs a debt suspension agreement with French Ambassador Nicolas Galey in Islamabad, Monday. — Economic Affairs Division, Government of Pakistan Twitter

Pakistan and France have signed an agreement for the suspension of loans amounting to $107 million under the G20 Debt Service Suspension Initiative (DSSI), the Economic Affairs Division said on Monday.

In a press release, the Economic Affairs Division said the amount, initially repayable between July and December 2021, would now be repaid over a period of six years — including a one-year grace period — in semi-annual instalments.

The agreement was signed by Ministry of Economic Affairs Secretary Mian Asad Hayaud Din and French Ambassador Nicolas Galey, the statement said.

"The government of Pakistan has already signed agreements with the French Republic for suspension of $261m. Due to the support extended by the development partners of Pakistan, the G20 DSSI has provided the fiscal space which was necessary to deal with the urgent health and economic needs of the Islamic Republic of Pakistan," the statement added.

The total amount of debt that has been suspended and rescheduled under the DSSI framework, covering the period from May 2020 to December 2021, stands at $3,688m.

"Pakistan has already concluded and signed 93 agreements with 21 bilateral creditors for the rescheduling of its debts under the G20 DSSI framework, amounting to rescheduling of almost $3,150m. The signing of [the] above-mentioned agreements brings this total to $3,257m," the press release said.

It added that negotiations were ongoing for the remaining agreements to be signed under the DSSI framework.

Earlier this month, Pakistan had signed two debt service suspension agreements with Japan and Switzerland for the suspension of $197.5m in loans.

Of this total amount, $191.60m was owed to Japanese International Cooperation Agency during the period from January to June 2021 and $5.89m to the Government of the Swiss Confederation during the period from July to December 2021.

In March, a similar agreement was signed with the Saudi Fund for Development for the suspension of debt servicing of $846m.

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