ISLAMABAD, Dec 12: Pakistan and Germany on Thursday agreed on the utilization of an overall amount of grants, soft loans and debt for development swaps of approximately 140 million Euro.

This was decided during the negotiations held in Islamabad for the first time since 1996 on German-Pakistan development cooperation. This sends out a clear signal that relations in the development field are now returning to normal.

The two governments had already agreed last year - under the overcharging aim of poverty reduction - to focus in future on three areas, namely basic education, basic health and renewable energies, and this is where the new funds are being targeted.

Germany’s commitment to renewable energies is part of the pledge Chancellor Schroeder made in Johannesburg to forge a strategic partnership with developing countries in the energy sphere.

Germany has long been involved in hydropower in Pakistan and this year a soft loan of Euro 301.1 million from the financial cooperation fund has been allocated to the financing of a medium- sized hydropower station in the north of the country.

Euro 25 million are being targeted at health projects, including the National Health academy in Islamabad which will benefit from the allocation of Euro 2 million (technical co-operation) being provided for the training of medical staff.

This year, the German government once more agreed on a debt-for- development swap with Pakistan, under which Germany relieves debts of Euro 25.6 million and the Pakistan government devotes half of that amount in local currency to basic education.

The same amount in debt relief had already been made available last year and will be used to introduce a technical stream at more than 1000 secondary schools.—APP