Japan defers $370m debt payment in view of Pakistan’s fight against Covid-19

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Zubair Qureshi
Islamabad

Japan has agreed to defer Pakistan’s debt amounting to JPY 40 billion (approximately USD 370 million) in view of Pakistan’s efforts to fight against Covid-19.

An agreement to this effect was signed between Ambassador of Japan Matsuda Kuninori Secretary Ministry of Economic Affairs Noor Ahmed on Tuesday.

Under this agreement, repayments for the debt and interest due between May 1, 2020 and December 31, 2020 will be rescheduled after June 15, 2022.

This (debt deferment) is in line with the G20 Debt Service Suspension Initiative (DSSI) agreed on April 15, 2020.

According to a statement issued by the Embassy of Japan, the concessional loans are subject to the debt deferral and have been utilized for infrastructure development such as roads, tunnels, power plants and grids, irrigation, water supply, 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 rate, long grace and repayment period.

Ambassador Matsuda said on this occasion “After the stability of Afghanistan is realized, I believe some of these projects must be a part of the connectivity between Pakistan, Afghanistan and Central Asia.”

The ambassador said that economic shock caused by the outbreak of Covid-19 has continued on a global scale.

Japan provided Pakistan with direct support of USD 9.5 million and multilateral support of US$ 7.41 million to contain Covid-19, as well as the quick delivery of diagnostic kits and non-governmental support, all of which were on a grant basis.

International solidarity on the medical and economical front is necessary to fight against infectious diseases with no borders.

Ambassador Matsuda added the agreement, which represents Japan’s solidarity with Pakistan on the economic front.

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