Published On:April 4 2008
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Italy converts $100 mn debt for funding

Islamabad: Finance and Economic Affairs Division Minister Ishaq Dar chaired the Joint Management Committee meeting at the Economic Affairs Division for conversion of $100 million Italian debt into development projects funding.

The minister appreciated Italian side for debt conversion and emphasised that the selection of projects should be linked with the policy framework of the newly-elected government and contribute to the development of social sector in particular the poor segments of the society.

The committee considered projects to be funded under the Italian debt for development swap of approx. $100 million (euro 58 million and US $26 million) loan under the swap is proposed to be off set in five equal annual tranches and GoP has set aside $20 million, Rs 1.2 billion this year for this purpose. From the GoP side EAD Secretary led the delegation and Italian side by the Italian ambassador to Pakistan.

According to an official announcement here Italian government on the request of Pakistan agreed initially to wave off half of it loan euro 85 million approx. on presentation of record of expenditure incurred on upkeep of Afghan refugees since 2001. The debt cancellation occurred in 2006.

For the remaining ODA loan (Euro 58 million and US $26 million) both the sides agreed for a debt for development swap and agreement was signed in 2007. The payments eligible for swap operations are to be made from budgetary resources of the government of Pakistan and shall be spent on jointly agreed social and development projects by the Joint Management committee.

The announcement said priority would be accorded to projects aimed at rural development, poverty alleviation and education and may include the projects of federal government, provincial governments or local governments, non-governmental organisations or channelled by relevant UN organisations such as FAO, IFAD and WFP.

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