ISLAMABAD: Pakistan and Germany signed an agreement on Thursday for suspension of debt service of 26.213 million euro under the Debt Service Suspension Initiative (DSSI).

The German development bank known as KfW and the Economic Affairs Division signed the agreement on behalf of their respective governments.

The signing of the agreement coincides with the forthcoming celebrations for 60-year development cooperation between Pakistan and Germany.

KfW maintains an active portfolio of more than 600 million euro financial cooperation with Pakistan in the fields of energy, climate, governance, training and jobs creation for sustainable economic growth.

Following the request of the Pakistan government for a time-bound suspension of debt service to mitigate the health, economic and social impact of Covid-19 crisis, a memorandum of understanding on the Treatment of the Debt Service was signed in Paris in June last year.

The signing of DSSI will contribute to the much-needed relief for the Pakistan government to strengthen its economy in view of the challenging financial conditions triggered by Covid-19.

In September last year, the German government, through KfW, had provided a debt suspension facility to Pakistan through the first phase of DSSI amounting to 52.766 million euro.

The German government is also in the process of providing another debt suspension facility (DSSI Phase-3) to Pakistan for which matters are currently under discussion, said a German Embassy’s press release.

Published in Dawn, October 29th, 2021