Islamabad, 6 July 2023 (TDI): Pakistan and Italy have reached an agreement to extend the timeline of the Pakistan-Italian Debt Swap Agreement (PIDSA) through the Exchange of Letters (EoL).

The EoL was signed by Andreas Ferrarese, the Italian Ambassador in Pakistan, and the Secretary of the Ministry of Economic Affairs.

The extension prolongs the PIDSA until December 31, 2024, maintaining the same procedures, modalities, terms, and conditions as defined in the original agreement signed on November 4, 2006.

Completion of Remaining PIDSA Activities

During the extended period, several pending activities under the PIDSA will be finalized. These activities include the cancellation of remaining debt, completion of ongoing PIDSA projects, the transfer of assets, evaluation of the program’s impact, and the submission of the final report.

The PIDSA, which came into force in 2009, entails the swap of approximately $100 million (US $26.52 million & Euro 58.74 million) of Pakistan’s debt owed to Italy for investment in development projects across the country.

These projects cover sectors such as health, education, agriculture, environment, microcredit schemes, poverty alleviation, rural development, and infrastructure.

To date, the Management Committee (MC), the highest decision-making body of the PIDSA, co-chaired by the Italian Ambassador and the Secretary of the Ministry of Economic Affairs, along with representatives from the federal and provincial governments, has approved and funded 48 projects. Among these projects, 45 have been successfully completed, while 3 are still in progress.

Background of Pakistan-Italian Debt Swap Agreement

The Debt Swap Agreement between the Government of Pakistan and the Government of Italy was signed on November 4, 2006. It aimed to alleviate Pakistan’s debt burden by exchanging it for funds to be utilized in development projects. This agreement signifies the strong bilateral ties between the two nations.

Expressing gratitude, the Secretary of the Ministry of Economic Affairs thanked the Government of the Republic of Italy for their assistance under the Debt Swap Agreement and other technical support. The official emphasized the commitment to further enhance the bilateral relations between Pakistan and Italy.

By extending the PIDSA timeline, Pakistan and Italy continue their collaborative efforts to address development needs and strengthen their diplomatic relationship.

Extension of PIDSA in 2018

Previously both states agreed to further extend the timeline PIDSA, till 30th June 2020, through EoL, which helped in successful implementation of all the PIDSA operations including cancellation of the remaining debt amount.