ISLAMABAD, Jan 13: Japanese government has pledged 11.22 billion yen (approximately $100 million) loan on soft terms for rehabilitation and rebuilding in affected areas that were hit by the October last earthquake. The ‘Emergency Earthquake Recovery Loan’ under Japan’s Official Development Assistance (ODA) programme will be extended on concessionary terms with an interest rate of 1.3 per cent per annum, repayable over a period of 30 years, including a grace period of 10 years.

The loan agreement to this effect was signed by Khalid Saeed Secretary Economic Affairs Division, on behalf of the Government of Pakistan and Naoya Ochi, chief representative of Japan Bank for International Cooperation (JBIC) here on Friday.

The Japanese government had pledged a commodity loan programme of $100 million for the rehabilitation and reconstruction of the earthquake affected areas at the international donors conference.

The exchange of notes in this regard were earlier signed by the foreign ministers of the two countries on January 5, 2006.

The proceeds of the loan will be used to cover payments already made and/or to be made, on and after October 8, 2005, to the suppliers of goods for earthquake affected areas.

Since the earthquake devastated mostly the eastern part of the North West Frontier Province and Azad Kashmir, which are all relatively underdeveloped regions, there is an urgent need for rehabilitation to secure lifelines for the affected portion of the population.

This loan was extended as emergency assistance after a very short processing period lasting only about three months following the earthquake.

JBIC’s participation, together with the Japan International Cooperation Agency (JICA), in the damage and needs assessment carried out under the leadership of World Bank, ADB, and UN agencies.

Japan Bank for International (JBIC) is a policy-based financial institution. It has a statutory mandate to undertake lending and other financial operations for the promotion of Japanese exporters, importers and economic activities overseas for stability of international order and for economic and social development as well as economic stability in developing economies.—APP