Tokyo and Islamabad agreed to a debt relief of 40 billion yen (approximately $370 million) to free up fiscal space in Pakistan to battle Covid-19.
According to an official statement released by the Japanese embassy on Tuesday, this is in line with the G20 Debt Service Suspension Initiative (DSSI) negotiated on April 15, 2020, and the memorandum of understanding (MoU) signed between Pakistan and the creditor countries on June 9, 2020.
“On April 27, 2021, Ambassador of Japan to Pakistan Matsuda Kuninori and Secretary of the Ministry of Economic Affairs Noor Ahmed signed and exchanged notes to this effect in Islamabad,” it said.
From the early 1990s to the mid-2010s, concessional loans with debt deferral were used in Pakistan for infrastructure construction such as roads, tunnels, power plants and grids, irrigation, water supply, and drainage facilities.
“This agreement, which we signed today, reflects Japan’s economic solidarity with Pakistan,” Ambassador Matsuda stated.
