Pakistan to sign debt relief agreements with 4 countries
KARACHI: Pakistan will sign four debt relief agreements with Germany, Italy, Canada and the UK in exchange for investments in environmental conservation efforts.
“Debt for Nature (DFN) memoranda of understanding will be signed on June 5,” Zartaj Gul, Minister of State for Climate Change, told Arab News on Sunday.
According to the United Nations Development Program (UNDP), under an agreement from the DFN, the lender country agrees to reduce the debtor’s delinquency by channeling the money towards conservation and climate-related expenses.
Gul said that during the negotiation process Pakistan has assured creditors of its commitment to tackle climate change in exchange for “the amount of loans they will cancel”.
Pakistan owes nearly $ 11.54 billion to the Paris Club of lending countries, including $ 1.42 billion to Germany, $ 175 million to Italy, $ 5 million to the UK and 403 million dollars in Canada.
Pakistan has repaid around $ 40 million to Canada and Germany, according to an April report from the International Monetary Fund. An additional $ 29 million is expected to be paid to the two countries during the current fiscal year.
“We will not repay the debts but, against this part of the loan, we will make progress on restoring the natural environment whether it is conservation or restoration of biodiversity, or whether it is green jobs,” added Gul.
She explained that the signing of the DFN agreement was part of the event’s programming for World Environment Day on June 5, which Pakistan is hosting for the first time.
“Pakistan will seek to highlight environmental issues and showcase the country’s initiatives and its role in global efforts,” Gul said, adding that the country qualified for the DFN deal on the basis of its performance. in conservation efforts, including the 10 Billion Trees Tsunami Program.
The five-year tree planting initiative, launched by Prime Minister Imran Khan in 2018, aims to counter the extreme weather conditions that scientists associate with climate change.
“Our portfolio is very strong because we have worked for nature conservation in Pakistan, and it shows our commitment to tackle climate change. Pakistan’s efforts are recognized around the world. Over the past three years, we have shown performance through the Billion Tree Tsunami, Clean Green Pakistan, Plastic Bag Ban, Pakistan Charging, Ecosystem Restoration and Enabling place of 23 national parks. “
Pakistan’s Economic Affairs Division, which works with the UK, Italy, Germany and Canada, has “shown a willingness” to sign the deal.
In his comments to reporters last week, Climate Change Minister Malik Amin Aslam confirmed the four countries’ expressions of interest.
“We hope to give the good news to the world and the Pakistanis that Pakistan is making progress with some countries on the DFN (agreement),” Gul said.
Although the exact amount of the deal remains unknown, Gul said it will be determined after the final ratification of the deal by governments.
“These are long-standing loans that are non-repayable under the current circumstances. Nature-based solutions in return for debt relief will not only reduce Pakistan’s debt burden, but also benefit the environment of the country and the region as a whole. “