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Belgium reschedules $6.6m debt: accord signed

RECORDER REPORT

ISLAMABAD: Belgium rescheduled its $6.6 million (BF257.55 million) debt against Pakistan here on Monday.

A bilateral agreement was signed between the two governments here covering the maturities of ODA loans, says a handout.

Under this agreement debt service of Belgium Franc of 257.55 million due during the period from July 1, 1998 to December 31, 2000, on loans contracted up to September 30, 1997, has been rescheduled for payment in 20 semi-annual installments, commencing from July 1, 2000.

Agreement was signed by Igor Haustrate on behalf of the Kingdom of Belgium while Javid Akram, Secretary, Economic Affairs Division represented Pakistan.

This rescheduling is part of government's policy of rolling over its external debt to ease burden on foreign exchange reserves of the country.

APP adds: Agreements with four Paris club member countries - UK, Italy, Finland and Switzerland - are scheduled to be signed during current month.

However debt relief pact with Japan worth $ 800 million will be signed next month and negotiations between Pakistan and Japan are already on advanced stage.

Later talking to APP, Secretary, Economic Affairs division Javid Akram said that agreement signing process with all the 18 Paris club member countries would be accomplished within the extended period (February 29).

Negotiations are also going on with six non-Paris club member countries - China, Czech, UAE, Kuwait, Saudi Arabia and Libya - for signing rescheduling agreements worth $ 350 million.

ODA loans available on concessional rates ranging between zero to 2% on average have been rescheduled for 20 years including ten years grace period.

While non-ODA debt secured on market rate (Libor plus 0.5%) have been rescheduled with 15 years repayment period, commencing from 2003.

Of total debt agreed to be rescheduled in January 99 worth $ 3.3 billion, ODA broadly constituted 2/3 and non-ODA 1/3 of the loan.

Non Paris club member states are being convinced to sign debt relief accords on bilateral basis and similar terms and conditions agreed with Paris club member countries.