ISLAMABAD: Pakistan has inked an agreement with the Saudi Fund for Development (SFD) to suspend debt payment of $846 million under the G20’s Debt Service Suspension Initiative for six years (DSSI).
A total of about $3.688 billion in Pakistan’s foreign debt has been suspended and rescheduled under the DSSI framework, which runs from May 2020 to December 2021. This debt has been cancelled and rescheduled in total.
This loan was originally scheduled to be pad between May 2020 and December 2021, but was deferred by the G20 under the DSSI to assist impoverished nations in weathering difficult financial circumstances after the worldwide economic downturn caused by COVID-19 limitations.
The debt will now be paid off twice a year for six years, starting in 2022.
The government has already inked 80 agreements with 21 bilateral creditors for debt restructuring under the G20’s DSSI framework, totaling $2.088 billion in restructured debt.
With the signature of the agreement with the SDF, the total sum rescheduled now stands at $2.934 billion. Negotiations for the rest of the $754 million are still going on, and the ministry of economic affairs says that agreements with the corresponding bilateral development partners are likely to be signed this fiscal year.
Pakistan owes over $20.7 billion to 11 G20 countries via 155 loans. Nobody else has loaned money to Pakistan.
The World Bank and the International Monetary Fund (IMF) pushed for the DSSI after the emergence of COVID-19 two years ago.
Mian Asad Hayaud Din, Secretary of the Ministry of Economic Affairs, signed the framework agreement for debt suspension in the presence of Saudi Arabia’s Ambassador to Pakistan, Nawaf bin Saeed Al-Malkiy, and SFD Director General for Asia, Dr. Saud Ayid R. Alshammari.
