Pakistan, Italy extend Debt for Development Swap Agreement

ISLAMABAD: Pakistan and Italy have agreed to further extend the timeline of the Pak-Italian Debt for Development Swap Agreement (PIDSA) till June 30, 2020.

This will be conducted through a Exchange of Letter (EoL) for the successful implementation of all the PIDSA operations including cancellation of the remaining debt amount.

Pak-Italian debt for Development Swap Agreement (PIDSA) was signed in Islamabad between the governments of Italy and Pakistan on November 4, 2006.

The agreement foresees the utilisation of the funds for buying goods and services to implement development projects in the areas of agriculture, health, education, environment, basic infrastructure, rural development, microcredit and poverty alleviation.

Under the agreement, US $26.52 million and Euro 58.74 million equivalent to Rs.8.27 billion of Pakistan’s debt owed to Italy was to be swapped for expenditure on selected development projects.

The management committee of PIDSA is the highest decision making forum for the implementation of PIDSA programme assisted by the Technical Support Unit (TSU).

To date, a total of 35 projects have been completed, ten projects are ongoing, while four projects are still to be undertaken.Italy has cancelled debt over 78pct of the Rs.6.41 billion of the total debt swap amount of Rs. 8.27 billion.

The basic principle of the agreement is that the debt that Pakistan owes to Italy will be canceled when the funds allocated to the different development projects will be spent for the execution of the activities planned in favor of the beneficiaries.