ISLAMABAD: Italy has agreed to waive Pakistan’s total bilateral debt by swapping half of it for expenditure incurred on Afghan refugees, while the remaining amount of debts of $26.52 million and 58.74 million euros will be swapped for the jointly-agreed social and developmental projects under Debt for Development Swap Agreement in 2006. According to a press released issued by the Ministry of Finance on Tuesday, the debt swap agreement between the two governments was reached on the basis of the Paris Club Debt Rescheduling agreement of 2001.
The debt conversion would take effect in five annual tranches on June 30 of each year. Each annual tranche would be equal to one fifth of the total debt, which would be converted to Pakistani rupees at the exchange rate quoted by the State Bank of Pakistan on that day and deposited in a counterpart fund operated through an assignment account.
