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Japan-Pakistan agree on debt deferral of $200 million

Debt 1

ISLAMABAD: The Governments of Pakistan and Japan on Saturday agreed on debt deferral amounting to $200 million, as the second phase of “the G20 Debt Service Suspension Initiative (DSSI)”.

Prior to this, both governments agreed on the first debt deferral amounting to $370 million on April 27, 2021, under the same initiative, said a press release issued here.

The total amount of deferred debt has reached approximately $570 million, which will widen the fiscal space for the Government of Pakistan to restore its economy affected by the COVID-19 pandemic.

The concessional loans, subject to debt deferral, have been utilized for infrastructure development such as roads, tunnels, power plants and grids, irrigation, water supply, and drainage facilities in Pakistan from the early 1990s to the mid-2010s.

These concessional loans have favorable conditions for Pakistan in terms of low-interest rates, as well as long grace and the repayment period.

Under the second agreement, repayments for the debt and interest due between January 1 and June 30, 2021, will be rescheduled after December 15, 2022.

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