20000220

Loans rescheduling

accords with UK,

Finland due tomorrow

ISLAMABAD: Separate agreements for rescheduling loans of $8.3 million with Finland and United Kingdom are scheduled to be signed on February 21, official sources said here on Saturday.

The agreement between Pakistan and Finland for a loan of around $4.6 million will be signed in Islamabad on Monday, sources said.

With the UK, the agreement for rescheduling $3.7 million will be signed either on February 21 or 22 through 'Exchange of Notes', sources added.

The two agreements would be signed following a debt accord with Italy for $54 million loans, inked in Rome on Friday. The loan was payable during the period from July 1, 1998 to December 31, 2000.

Navid Ahsan, Additional Secretary, Economic Affairs Division, and Marcello Spatafora, Director General, Economic and Financial Cooperation, Italian Ministry of Foreign Affairs, signed the agreement.

The loan of $54 million, which Italy has rescheduled, includes $45 million of Official Development Assistance (ODA) and $9 million of non-ODA loans.

The ODA loans are, payable in 20 years, including 10 years grace period, commencing from July, 2010. The interest rate on these loans has been agreed at 1.5 percent.

The non-ODA loans are payable in 15 years, including a three-year grace period, at an interest rate of six-month Libor plus 0.5 percent sources said.

Pakistan, in January last, had signed an agreement with the Paris Club for rescheduling of $3.3 billion debt over a period of 20 years. Under the agreement, Pakistan is to sign bilateral agreements individually with the creditor countries of the Club.

After the signing of agreements with Finland and the UK, the number of creditor countries with whom Pakistan has concluded debt accords would increase to 16.

According to sources, agreements with the two remaining countries, out of total 18 Paris Club members, would also be signed soon.

Agreement with Switzerland has been completed and might be signed any time, sources said, adding that similar accord with Japan is expected by the end of the current month.

Sources said that talks were also being held at appropriate level with non-Paris Club members for rescheduling of Pakistan's debt. Talks with UAE in this regard have been almost completed, sources added.

Of the non-Paris Club members, China has already agreed to reschedule its official loan (government to government) to Pakistan during the visit of Chief Executive, General Pervez Musharraf, to Beijing.ÑAPP