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August 9, 2019

Italy announces $22.9mln soft loan for economic initiatives

Business

August 9, 2019

ISLAMABAD: Italian government on Thursday pledged 20.5 million Euro ($22.9 million) worth of soft loan to support the economic transformation initiatives in Gilgit-Baltistan.

Secretary Economic Affairs Division Noor Ahmed and Ambassador of Italy in Pakistan Stefano Pontecorvo signed the financial agreement. Minister for Economic Affairs Hammad Azhar witnessed the signing ceremony of the financial agreement with the government of the Italian Republic.

“This is 28 years (financing) facility with 10 years of grace period and zero percent interest rate,” the finance ministry said in a statement.

Azhar thanked the Italian government for providing the financial facility for the betterment of the people of Gilgit-Baltistan. “Government of Pakistan honours and appreciates financial cooperation from the government of Italian Republic and looks forward to strengthen bilateral relations in future specifically after the Joint Economic Commission in October 2019.”

Gilgit-Baltistan is a remote mountainous region, less population with comparatively higher incidence of poverty. Agriculture productivity is generally low due to poor access to quality inputs, huge post-harvest losses – 45 percent for apricot and 10 percent for potato –, lack of local processing and value addition and poor access to markets.

Economic transformation initiatives Gilgit-Baltistan is the largest developmental program of Gilgit-Baltistan government. International Fund for Agricultural Development (IFAD) is providing $76 million over a period of seven years. Italian government has agreed to join hands with IFAD providing a soft loan of Euro 20.5 million to be utilised for financing the program activities.

The objective of the program is substantial increase in irrigated crop areas and production and improved connectivity with markets through investments in economic infrastructure. The program will improve incomes and reduce poverty and malnutrition in rural areas of Gilgit-Baltistan region benefitting around 100,000 rural households.

“Under the economic transformation initiatives program, the government of the Italian Republic will provide infrastructural support, capacity building and technical assistance for the value chain of key agricultural products to the benefit of rural communities of Gilgit-Baltistan,” the finance ministry said.

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