ISLAMABAD: The Economic Coordination Committee (ECC) has allowed Economic Affairs Division (EAD) to sign debt rescheduling agreement with Russia under two different Debt Service Suspension Initiatives (DSSIs), official sources told Business Recorder.

On February 13, 2023, Ministry of Economic Affairs informed the forum that G-20 Finance Ministers in their meeting held in April 2020 announced debt relief for IDA eligible countries, for mitigating the socioeconomic impact of Covid-19, known as the Debt Service Suspension Initiative (DSSI-I).

Debt relief under the G-20 DSSI-I entailed the suspension of principal and interest payments due from May to December 2020. The ECC in its meeting held on May20, 2020, approved the proposal and authorized EAD to apply for debt relief and proceed with signing of the MoUs with creditor countries.

Pursuant to the ECC decision Economic Affairs Division entered into negotiations with bilateral creditors. To date under DSSI-1, 32 debt rescheduling agreements with 20 creditor countries were signed. The agreement with UAE is in the signing phase. DSSI-1 yielded debt relief of $ 1.608 billion. The G-20 in their meeting held on October 14, 2020 extended the DSSI for a period of six months, i.e., January-June 2021, known as DSSI-II (Extension).

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The ECC in its meeting on November 20, 2020 authorized EAD to proceed with modalities for debt relief under the DSSI-II. So far, 36 debt rescheduling agreements with 18 creditor countries have been signed. The agreement with UAE was in the signing phase. DSSI-II yielded debt relief of $1.131 billion.

The G-20 Finance Ministers in their meeting held on April 7, 2021 extended debt relief for a further and final period of six months (Jul - Dec 2021, known as DSSI-III (final extension).

The ECC, in its meeting on June 9, 2021, authorized EAD to proceed with modalities for debt relief under the DSSI-III. So far, 37 debt rescheduling agreements with 15 creditor countries have been signed. Negotiations for finalization of debt rescheduling agreements with Belgium and UK were in process while the agreements with Republic of Korea, and Sweden were in their signing phase. Debt relief under the DSSI-III stands at almost $ 947 million.

Copyright Business Recorder, 2023