Japan extends soft loan of 19.7 billion yen for development

Soft loan has two components: Khyber Pakhtunkhwa Emergency Rural Road Rehabilitation, Emergency Import Support Loan.

ISLAMABAD: The Government of Japan extended a soft loan of 19.7 billion Yen (approximately US$ 233 million) to the Government of Pakistan on Friday with a view to promoting economic stabilization and development efforts of the Government of Pakistan.

The notes were signed and exchanged between Chihiro Atsumi, Ambassador of Japan to Pakistan and Sibtain Fazal Halim, Secretary Economic Affairs Division, Government of Pakistan, in Islamabad.

At the "Pakistan Development Forum" in November 2010, the Government of Japan pledged US$ 500 million worth of assistance, which aimed at rehabilitation and reconstruction of the areas affected by the floods.

The soft loan comprises of two components. First being "Khyber Pakhtunkhwa Emergency Rural Road Rehabilitation Project US$ 174 million", the road network in Khyber Pakhtunkwa was severely hit by the floods, making the areas inaccessible and the communities divided. The project aims for prompt restoration of economic and social activities by reconstructing rural roads and bridges.

The second component of the loan is "Emergency Import Support Loan", which will be utilized to cover payment of essential items for flood disaster restoration such as foods, fertilizers, seeds, construction materials and construction machineries.

This loan is extended on concessionary terms with an interest rate of 0.01% per annum. The loan has a repayment period of 40 years, including grace period of 10 years.

The Government of Japan is fully committed to support Pakistan in its endeavors to fight against terrorism and at the same time and create a strong and sustainable economic foundation.