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Japan agrees to defer repayment of $200m loans

First debt deferral of $370m signed in April this year

SAMAA | - Posted: Oct 22, 2021 | Last Updated: 1 month ago
SAMAA |
Posted: Oct 22, 2021 | Last Updated: 1 month ago

The governments of Japan and Pakistan agreed on Friday on a debt deferral of $200 million as the second phase of ‘the G20 debt service suspension initiative or DSSI’.

Previously, both governments agreed on the first debt deferral of nearly $370 million on April 27 this year under the same initiative, said a press release issued here.

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

The concessional loans which date back to the early 1990s, subject to debt deferral, were utilized for infrastructure development such as roads, tunnels, power plants and grids, irrigation, water supply, and drainage facilities in Pakistan.

These loans have favorable conditions for Pakistan in terms of low-interest rates, as well as lengthier grace and repayment periods.

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

In addition to the debt deferral, Japan has also extended $23.5 million in grants to Pakistan for supplementing its counter-COVID-19 measures as follows:

  • Feb 2020:  Delivery of diagnostic kits: In Apr-May 2020, disbursement of a total of $7.41 million to Unicef, IOM, IFRC, UNHCR and UNOPS for providing hygiene items and alternative learning opportunities, and training health workers, etc.,
  • From December 2020:  Grant Assistance of $9.5 million to NDMA for procuring medical equipment.
  • And  in March 2021: Grant assistance of $6.59 million to Unicef for improving the vaccine cold-chain

Ambassador of Japan to Pakistan, Matsuda Kuninori, who is about to be transferred to the Japanese Embassy in Ukraine after nearly three years in Pakistan, said, “I am aware that Pakistan’s Covid-19 affected economy is on a solid recovery path, including the prospect of higher GDP growth.

Next year, Japan and Pakistan are going to celebrate the 70th anniversary of the establishment of diplomatic ties.

“I strongly hope that a new chapter will be carved in the history of our friendship on the basis of Japan’s development cooperation in the past decades.”

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Japan agrees to defer repayment of $200m loans, Japan and Pakistan deals, Japan and Pakistan business, G20
 

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