“Granting debt service relief to Pakistan will make it easier for Pakistan to deal with the impacts of the COVID-19 pandemic and rebuild in a sustainable way,” Minister of International Development Dag-Inge Ulstein said on Wednesday.
Norway has now entered into a bilateral agreement with Pakistan on the deferral of payment to Norway of NOK 33 million in interest and principal payments.
“Many poor countries have had insufficient economic room for maneuver to enable them to respond to the COVID-19 pandemic.
“Norway has supported a rapid and flexible one-year suspension of debt service payments for all of the world’s 76 poorest countries,” Ulstein said.
Debt service relief
In response to the COVID-19 pandemic, the G20 and the Paris Club have granted debt service relief (a debt moratorium) on interest and principal payments that fall due in June 2021.
Norway has previously canceled debt owed to it by more than 20 poor countries.
Now, only Pakistan qualifies for debt service relief from Norway. The debt involved is the result of defaults on export credits from the Norwegian Export Credit Guarantee Agency.
It is due to be repaid in full in 2024.
Source: Ministry of Foreign Affairs / Norway Today