Pakistan, SDF sign agreements for debt servicing suspension

ISLAMABAD: Pakistan has signed agreements with the Saudi Fund for Development (SFD) for suspension of debt servicing of $846 million for six years under the G20’s Debt Service Suspension Initiative (DSSI).

The total amount of Pakistan’s external debt that has been suspended and rescheduled under the DSSI framework is about $3.688 billion, covering the period from May 2020 to December 2021.

This debt amount was due to be paid during May 2020 to December 2021 under the original plan but was suspended by G20 under the DSSI to support poor countries weather tough financial conditions following international economic slowdown amid Covid-19 restrictions.

The amount will now be repaid over a period of six years starting from 2022 in semi-annual installments.

The country has already signed 80 agreements with 21 bilateral creditors for the rescheduling of its debts under the G20’s DSSI framework, amounting to rescheduling of $2.088 billion.

The signing of agreement with the SDF brings the total rescheduled amount to $2.934 billion. The negotiations for the remaining $754 million are underway and agreements are expected to be signed with respective bilateral development partners within the current fiscal year, the ministry of economic affairs said.

Pakistan’s total debt payable to 11 of G20 nations stands at about $20.7 billion under 155 loans. Pakistan does not have any loan from the other nine members.

The DSSI was encouraged by the World Bank and the International Monetary Fund (IMF) following the outbreak of Covid-19 two years ago.

Ministry of Economic Affairs Secretary Mian Asad Hayaud Din signed the framework agreement on debt suspension at a ceremony attended by Saudi Arabia Ambassador to Pakistan Nawaf bin Saeed Al-Malkiy and SFD Director General for Asia Dr Saud Ayid R Alshammari.