A day after President George W Bush lifted the sanctions imposed against Islamabad and New Delhi following 1998 nuclear tests, US and Pakistan on Monday inked an agreement rescheduling a $ 379 million government-to-government debt owed by Islamabad to Washington.
The agreement, signed by US ambassador to Pakistan Wendy Chamberlin and top Pakistan finance ministry official Nawid Ahsan, is in line with the general agreement on debt rescheduling for Pakistan reached by Paris club members in January this year, officials in Islamabad said. That agreement permitted Pakistan to reschedule about $ 1.8 bilion in official debt after negotiating specific agreements with each creditor country. Under the terms of rescheduling, official development assistance debt will be payable over a period of 20 years, including a 10-year grace starting from November 2011. The non-ODA debt will be payable over a period of 18 years, including a three-year grace starting from November 2004.
The interest rates on ODA debt are average of original concessional rates while those of non-ODA debt according to appropriate market rate. Speaking after the signing ceremony, Chamberlin said the rescheduling agreement will give Pakistan critical breathing space and reduce its repayment burden.
Bureau Report