ISLAMABAD, Jan 7: The government has decided to retire $1 billion Asian Development Bank debt in early February. "Earlier, we had planned to initially repay World Bank and ADB loans worth $1 billion , but now we would be repaying ADB's $1 billion carrying six to 11 per cent interest rate," said Economic Adviser to the ministry of finance and Director General of the Debt Coordination Office, Dr Ashfaque Hasan Khan.

Talking to Dawn here on Wednesday, he said the World Bank had been informed that in the first phase Pakistan government would be retiring the most expensive debt of the ADB.

"ADB's debt is the most expensive one compared to World Bank and IMF loans," he said, adding details were being finalized to repay a total of $4.5 billion debt that carries very high interest rates.

This debt will be repaid during the next four-year period after which the country's annual debt servicing will come down to 15 per cent of total export proceed from 50 per cent currently.

He said since Pakistan was for the first paying back some of its expensive debt before time, it had been decided to hold a formal ceremony in which the cheque of $1 billion would be handed over to the ADB senior official in Islamabad.

The economic adviser claimed that Pakistan's external debt and foreign exchange liabilities, which had reached unsustainable levels by 1998-99, had started moving towards sustainability.

He said that debt policy work was being strengthened in various departments of the ministry of finance, including the external finance wing and the budget wing.

Responding to a question, Dr Khan said that there had been some slight delay in the issuance of $500 million euro bonds. Nevertheless, he pointed out that road shows in various important countries would be held in February for which lead manger and co- lead manger had finalized their arrangements. The main issue, he said, was the pricing which was still to be finalized and that it would be done by going into the international bond market.