ISLAMABAD: Pakistan on Thursday signed two debt service suspension agreements worth $846 million under the G20 Debt Service Suspension Initiative (DSSI) with the Saudi Fund for Development. development (SFD).

The initiative was adopted by the world’s top 20 economies amid the coronavirus pandemic to provide financial assistance to poorer countries at a time when global economic activities were slowing and public debt in emerging markets was rising. The program’s raison d’être was to save the lives and livelihoods of millions of people in financially vulnerable countries that faced a mounting debt crisis while coping with raging COVID-19 infections. .

“This amount which was to be paid during the test period from May 2020 to December 2021 will now be reimbursed over a period of six years from 2022 in semi-annual installments,” the economy ministry said in a statement.

“With support from the Saudi Fund for Development – one of Pakistan’s main bilateral development partners – as well as other bilateral creditor countries, the G-20 DSSI has provided the necessary fiscal space to address to the health emergency and socio-economic needs of the Islamic Republic of Pakistan.

The statement said the total amount of debt that was suspended and rescheduled under the initiative during the stated period was $3.688 billion.

Pakistan signed the agreements with the Saudi Fund for Development in the presence of the kingdom’s envoy, Nawaf bin Saeed Al-Malky, in Islamabad.

“Pakistan has already concluded and signed 80 agreements with 21 bilateral creditors for debt rescheduling under the G-20 DSSI, amounting to a rescheduling of $2,088 million,” the ministry said.

He added that the signing of agreements with the Saudi Fund for Development had brought the total rescheduled amount to $2,934 million, adding that negotiations for the remaining $754 million were ongoing.

“Agreements for this amount [$754 million] should be signed with the respective bilateral development partners during the current fiscal year,” he added. In 2020, the world’s poorest countries, including Pakistan, saved more than $12 billion owed to sovereign and other creditors during the year through their participation in a debt relief program.

The program has deferred these payments to a later date, but does not cancel them outright. Pakistan was the second biggest saver among DSSI-eligible countries in 2020 with $2.4 billion, just behind Angola which saved some $3.4 billion.