Pakistan got debt rescheduling under Paris Club arrangement in Nov, 2001. Five donor countries i.e. Belgium,Canada, Germany, Italy and Norway have entered into debt swap agreements with Pakistan under this arrangement. The Government of Italy cancelled 50% of its debt against expenditures incurred by GOP on Afghan refugees’ related projects. For the remaining 50% (approximately US$ 100 million) Government of Italy and Government of Pakistan signed an Agreement on Debt for Development Swap that became operational on January 2009.
Under this Agreement, development projects submitted by Federal, Provincial or local Governments,Non-Governmental Organizations or channeled by relevant U.N Organizations on the agreed sectors of Health, Education, Agriculture and basic infrastructures leading to socio-economic development and environmental protection shall be financed.
A Management Committee (MC) has been established for selection, approval, monitoring and evaluation of the projects as well as for the verification of the achievements. The MC is chaired by the Secretary of EAD and the Italian Ambassador, with representatives from all the provinces, the line ministries and Italian Development Cooperation. Moreover, a Technical Support Unit (TSU) has been established in EAD which is co-directed by both the parties to technically support the MC.