Follow Us:

France signs debt suspension pact with Pakistan

The loan amount, which stands to the tune of $108 million, was required to be paid between July and December 2021. The same would now be repaid over the period of the next six years. This also includes a grace period of one year. The installments shall be paid in form of semi-annual installments.

SNS | Islamabad |

In a positive development in favour of debt-ridden Pakistan, France has extended a debt suspension of $108 million. On Monday, representatives from both countries signed an agreement for the same. The debt relief agreement is signed under the G-20 Debt Service Suspension Initiative (DSSI). The scheme is intended to provide financial relief to poor nations so that they can absorb the shocks created by Covid-19.

The loan amount, which stands to the tune of $108 million, was required to be paid between July and December 2021. The same would now be repaid over the period of next six years. This also includes a grace period of one-year. The installments shall be paid in form of semi-annual installments.

Pakistan’s Secretary of Economic Affairs Mian Asad Hayaud Sin and France’s Ambassador to Pakistan, Nicolas Galey, signed the agreement in Islamabad.

The Economic Affairs Division of Pakistan in its official statement said, “The government of Pakistan has already signed agreements with the French Republic for suspension of $261m. Due to the support extended by the development partners of Pakistan, the G20 DSSI has provided the fiscal space which was necessary to deal with the urgent health and economic needs of the Islamic Republic of Pakistan. Pakistan has already concluded and signed 93 agreements with 21 bilateral creditors for the rescheduling of its debts under the G20 DSSI framework, amounting to a rescheduling of almost $3,150m. The signing of [the] above-mentioned agreements brings this total to $3,257m”.

It is also observed that the total debt amount suspended between May 2020 to December 2021 stands at a whopping $3688 million. The government also declared that they are amidst negotiations and talks with other lending nations as well. They are referring to the G20 DSSI framework and seeking further relief from other countries.

A few days ago, Pakistan had signed a similar debt suspension agreement with Switzerland and Japan. The loan amount suspended by these countries stands to the tune of $197.5 million. Out of the total amount suspended, Pakistan owed $191.60 million to the Japanese Cooperation Agency. $5.89 million was outstanding towards the Government of the Swiss Confederation. The repayment period for the loan was from July to December 2021.

Earlier, in March this year, Pakistan had secured a similar deal from Saudi Arabia. The Saudi Fund for Development was secured for the suspension of debt to the tune of $846 million.

In total, Pakistan has signed around 93 similar agreements with about 21 bilateral creditors. The agreements aim to reschedule $3.15 billion of debt owed by Pakistan. The agreements have been signed under the G-20 DSSI framework.