ISLAMABAD: Pakistan will sign Debt-for-Nature (DFN) programme with Germany, Italy, Canada and the United Kingdom on World Environment Day on June 5 for debt relief in exchange for investments in environmental conservation efforts.
DFN programme would see debt relief in return for binding commitments to achieve conservation targets, with lender countries agreeing to reduce Pakistan’s outstanding payments and channeling the money into conservation and climate-related expenses instead, Minister of State for Climate Change Zartaj Gul told a foreign media outlet.
The DFN agreement was part of a line-up of events for World Environment Day on June 5, which Pakistan will be hosting for the first time, she said.
The exact amount for the DFN agreement would be determined after the final ratification of the agreement by the respective governments, Gul told Arab News.
Pakistan owes nearly $11.54 billion to the Paris Club including $1.42 billion to Germany, $175 million to Italy, $5 million to the UK, and $403 million to Canada, according to the media report.
According to an April 2021 report by the International Monetary Fund (IMF), Pakistan has repaid around $40 million to Canada and Germany and is scheduled to pay an additional $29 million to both countries during the current fiscal year.
“These are longstanding and non-payable loans under the current circumstances,” Gul said, adding, “Nature-based solutions in exchange for debt relief will not only reduce Pakistan’s debt burden but will also benefit the environment in the country and the region as a whole.”
Copyright Business Recorder, 2021.