Under the debt swap, US$ 100 million would be utilized to finance development projects in Pakistan, mainly for social sectors like health, education and sanitation.
The agreement was signed by Secretary of Economic Affairs Division, Farrakh Qayyum and Italian Ambassador in Pakistan, Vincenzo Prati.
The Italian government has offered to convert part of their loans into debt swap which could be converted into rupees and utilized in various social sector development projects, Farrakh Qayyum remarked, APP reported.
He said that Italy has been proactive in assisting Pakistan in social sector developments, adding that it was already executing such projects in the country.
In this extremely crucial moment for Pakistan, the Development Swap Agreement is an essential initiative undertaken by the Italian Government, which erases debt through the execution of development projects, he added.
He said that a committee co-chaired by Secretary EAD and the Italian Ambassador was evaluating about 62 projects which he said would be allocated throughout Pakistan.
Speaking on the occasion, Italian Ambassador said that Italy would provide all possible support for the development of social sector projects in the country, adding that its projects were already under progress in northern areas.
He said that Italy would also launch a project of preserving the archaeological heritage in Swat valley on a sustainable basis, adding that the institute would also be made to serve this purpose, APP reported.
It may be recalled that the financial envelope of the approved projects, which is worth Rs.3.6 Billion and ready for implementation, represents almost half of the agreement.
The plan covers varied and essential fields of the social sector like health, education and sanitation, sustainable economy through micro-credit, community development, sustainable agriculture and environmental protection.
The parties have agreed upon an allocation of US$ 10 million for the internally displaced persons, which is to be negotiated with the concerned authorities of NWFP, with an aim to establish appropriate activities for a prompt rehabilitation of the areas affected by the war against extremism.
The projects, that are promoted and executed by NGOs, Italian NGOs and the public sector in accordance with agreed shares, will be allocated throughout Pakistan.
These include two mega integrated projects, one for the Northern Area that focuses on Central Karakorum National Park and its surrounding villages, and the other on the Frontier Regions of FATA.
Other projects focus on the commercialization and promotion of olive and olive products in Balochistan, NWFP and Punjab; construction of an International Center for Reconstructive Surgery; vocational training and shelter homes in order to assist the women victims of acid attacks in Punjab in their physical and social struggles; initiatives in Balochistan, Punjab and Sindh addressing kidney, eye-care services and micro-credit schemes.
The General Strategic Plan provides the basis to complete the commitment before the end of 2009 for the entire amount of the Agreement.
By launching Calls for Proposals, a balanced implementation share in geographic, thematic and organizational terms can be ensured.
The Italian Government is thoroughly engaged in finalizing two significant contributions to the regions bordering Afghanistan by offering micro-finance facilities of 40 million Euros and vocational training worth 20 million Euros.