Islamabad: September 21

Japan has agreed to defer around $160 million of debt for cash-strapped Pakistan as part of the latest phase of the G20’s Debt Service Suspension Initiative (DSSI), according to an official statement released on Wednesday. .

Previously, the two governments agreed on the first debt deferral of approximately $370 million on April 27, 2021 and the second debt deferral of approximately $200 million on October 22, 2021, as part of the same initiative.

The total amount of deferred debt has reached around $730 million, which will expand the Pakistani government’s fiscal space to restore its economy hit by the COVID-19 pandemic and catastrophic floods.

Concessional loans, subject to debt deferral, have been used for the development of infrastructure such as roads, tunnels, power stations and networks, irrigation, water supply and drainage facilities in Pakistan from the early 1990s to the mid-2010s.

These concessional loans have favorable terms for Pakistan in terms of low interest rates, as well as long grace and repayment periods. According to the latest agreement, debt and interest payments due between July 1 and December 31, 2021 will be rescheduled after June 15, 2023.

In addition to the debt deferral, the Japanese government has decided to provide $7 million in emergency aid to Pakistan in response to the damage caused by the floods that have occurred in Pakistan since mid-June.

This large emergency aid will implement humanitarian assistance activities for people severely affected by the floods in different parts of Pakistan through several international organizations in areas such as food, shelter and relief items. non-food items, health and medical care, and water and sanitation.

Wada Mitsuhiro, Japanese Ambassador to Pakistan, reaffirmed his commitment to continue supporting Pakistan.

“I want to assure that the Japanese government is ready to support the people of Pakistan. Given the rapid scale of the needs, we consider it essential to extend our best support and to be available to those affected,” he said.

“As part of the ‘Flood Response Plan 2022’, we will expand our assistance, ensuring collective and coordinated actions to respond to the national emergency,” the ambassador said.