Foreign loans worth $1.68b rescheduled

Talks still under way with Saudi Arabia, UAE to finalise agreements

ISLAMABAD:

The federal government has rescheduled 31 foreign loans worth $1.68 billion from 19 of the G20 countries in the first phase.

Under the second phase, negotiations have been completed for rescheduling agreements for 31 loans worth $514.7 million from 13 countries including China, Germany, Austria, France and Norway.

The federal cabinet has approved the signing of rescheduling agreements for these loans. Under the third phase, the G20 countries have announced the suspension of collection of loan installments from July to December 2021.

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Negotiations have kicked off to reschedule the repayment of $1.52 billion in loans.

However, it has been learnt that Saudi Arabia, UAE, UK, US, Italy, Japan and Russia, which are in the G20, have not agreed to reschedule Pakistan's loans.

As per documents available with The Express Tribune, the economic affairs division had announced that a group of G20 countries, which provide funding for International Monetary Fund (IMF) member countries, had decided to defer the installments of outstanding loans of Pakistan and other countries in the second and third phases to offset the negative impact on the global economy of the Covid-19 pandemic.

To avail this facility, the Economic Coordination Committee (ECC) of the Cabinet had authorised the economic affairs division in May 2020 to seek relief from lenders to Pakistan and to conclude loan rescheduling agreements with these countries.

A committee comprising officials of the economic affairs, finance division and law and justice divisions was set up to negotiate the debt rescheduling agreements.

So far, 31 loans worth $1.68 billion have been rescheduled with 19 countries.

However, negotiations are still under way with Saudi Arabia and the UAE to finalise debt rescheduling agreements under the first phase.

The G20 meeting on October 14, 2020 approved the deferment of repayment of arrears for the period from January to June 2021 under the second phase.

The ECC, in its meeting in November last year, gave the nod to the economic affairs division to negotiate a rescheduling of loans with the G20.

The debt rescheduling committee set up by the economic affairs division has so far completed negotiations with 13 countries for 31 debt rescheduling agreements worth $54 54 million. The federal cabinet has approved these agreements.

Under the second phase, loans from Saudi Arabia, UAE, UK, USA, Italy, Japan and Russia have not been rescheduled yet.

Negotiations are underway with these countries for rescheduling loans of worth $1.11 billion.

Of the $541.37 million loans rescheduled from 13 countries under the second phase, the principal amount is $332.4 million, while the interest amounts to $208.9 million.