Pakistan signs $846m Debt Service Suspension Agreements under G-20 DSSI Framework
ISLAMABAD – Pakistan has signed two Debt Service Suspension Agreements amounting to $846 million under the G-20 Debt Service Suspension Initiative (DSSI) Framework.
Nawaf bin Saeed Al-Malkiy, Ambassador of the Kingdom of Saudi Arabia to Pakistan, witnessed the signing ceremony held in Islamabad. Dr Saud Ayid R Alshammari, Director General for Asia, represented the SFD in the signing ceremony. This amount which was due to be paid during the testing period from May 2020 to December 2021 will now be repaid over a period of six years starting from 2022 in semi-annual installments. Due to the support extended by the Saudi Fund for Development – one of the major bilateral development partners of Pakistan – along with other bilateral creditor countries, the G-20 DSSI has provided the fiscal space which was necessary to deal with the urgent health and socioeconomic needs of the Islamic Republic of Pakistan. The total amount of debt that has been suspended and rescheduled under the DSSI framework, covering the period from May 2020 to December 2021, is $3,688 million.
Pakistan has already concluded and signed 80 agreements with 21 bilateral creditors for the rescheduling of its debts under the G-20 DSSI framework, amounting to rescheduling of $2,088 million. The signing of agreements with the Saudi Fund for Development brings the total rescheduled amount to $2,934 million while negotiations for the remaining $754 million are underway. The agreements for this amount are expected to be signed with respective bilateral development partners within the current fiscal year.
It is worth mentioning here that G-20 finance ministers, in their meeting held in April 2020, had announced debt relief for IDA-eligible countries to mitigate the socioeconomic impact of Covid-19, known as DSSI-I. Under DSSI-1 31 debt rescheduling agreements with 19 creditor countries have been signed. Negotiations for finalization of debt rescheduling agreements with 13 creditor countries have been completed. Negotiations for finalization of debt rescheduling agreements with Italy, Japan, Russia, United Arab Emirates, United Kingdom and United States of America were in progress. DSSI-II debt yielded relief of $1.130 billion.
Later, G-20 finance ministers on April 7, 2021 extended the DSSI for a further and final period of six months (July-Dec 2021), known as DSSI-III (final extension). Negotiations for finalization of debt rescheduling agreements under DSSI-III with the remaining bilateral creditors were currently underway. Debt relief under the G-20 DSSI (final extension), i.e., July-December, 2021 was around $952 million.