- The agreements will be signed with Germany, Italy, Canada and the United Kingdom
- Pakistan owes approximately $11.54 billion to different lenders
Pakistan is set to sign four major debt relief agreements with Germany, Italy, Canada, and the United Kingdom in exchange for investments in environmental protection efforts, reported Arab News.
“The memorandum of understanding under the debt-for-nature (DFN) program will be signed on June 5," State Minister for Climate Change Zartaj Gul was quoted as saying on Arab News.
According to the United Nations Development Programme (UNDP), lender countries have agreed to reduce the outstanding payments by channeling the money into conservation and climate-related expenses instead.
Gul mentioned that, during the negotiation process, Pakistan assured creditors of its commitment to combat climate change in exchange for “the amount of loans they will forgive".
Pakistan owes approximately $11.54 billion to a collection of lenders, including $1.42 billion to Germany, $175 million to Italy, $403 million to Canada, and $5 million to the United Kingdom.
According to a report from the International Monetary Fund in April, Pakistan has repaid around $40 million to Germany and Canada, with another $29 million scheduled later in the fiscal year.
“We will not pay back the debt but, against that part of the loan, we will make progress on the restoration of the natural environment whether it be biodiversity conservation or restoration, or be it green jobs," Gul added.
The Minister explained that this agreement would be part of the event lineup for the World Environment Day on the 5th of June, which Pakistan is officially hosting for the first time.
Gul added that Pakistan qualified for this deal based on its conservation efforts and performance in environmental sustainability, reiterating that "Pakistan will seek to highlight environmental issues and showcase the country’s initiatives and its role in global efforts".
“Our portfolio is very strong as we have done work for the conservation of nature in Pakistan, and it shows our commitment to combat climate change. Pakistan’s efforts are globally recognized. During the last three years, we have shown performance through the Billion Tree Tsunami, Clean Green Pakistan, plastic bag ban, recharge Pakistan, ecosystem restoration, and setting up 23 national parks.”