You are here

Debt treatment -
June 09, 2020

Accorded treatment

Agreement on the Debt service suspension Initiative (ISSD)

Categories of debt treated

Treatment of arrears as of April 30, 2020

Treatment of maturities falling due from May 01, 2020 up to December 31, 2020

Repayment profile

Treatment under Ad Hoc terms

Duration of the suspension of payment : from May 1st, 2020 until end- 2020

Perimeter of maturities and cut-off date

  • Suspension of principal repayments and interest payments
  • Cut-off date protecting new financing in case of possible future restructuring: March 24, 2020

Modalities for the debt service suspension

NPV-neutral for the suspension of payments

Repayment period: 3 years with a one-year grace period (4 years total)

Treatment will be achieved either through rescheduling or refinancing.

Specific provisions

The Government of the Islamic Republic of Pakistan is required to commit :

  • to use the created fiscal space to increase social, health or economic spending in response to the crisis. A monitoring system is expected to be put in place by the IFIs;
  • to disclose all public sector financial commitments (debt) , respecting commercially sensitive information. Technical Assistance is expected to be provided by the IFIs as appropriate to achieve this;
  • to comply with the debt limits on contracting new non-concessional during the suspension period agreed under the IMF Debt Limit Policy (DLP) or WBG policy.

Good will clause

If the Government of the Islamic Republic of Pakistan has fulfilled all its commitments under the Memorandum of Understanding dated June 9, 2020, the Participating Creditor Countries declare their intention to envisage a possible extension during 2020 taking into account the report to be produced by the World Bank Group and the International Monetary Fund on the liquidity needs of the eligible countries

Comparability of treatment provision

The Government of the Islamic Republic of Pakistan commits to seek from all its other bilateral official creditors a debt service treatment that is in line with the agreed term sheet providing the key features of the time-bound suspension of debt service payments initiative set out in Annex I and commits not to accord any of these creditors a treatment more favourable.

Organisation of the session

The agreement was signed by Mr. Guillaume CHABERT, Co-Chairman of the Paris Club.

The head of the debtor country was Mr. Noor AHMED, Secretary of the Economic Affairs Division.

Zircon - This is a contributing Drupal Theme
Design by WeebPal.