Most of the Donor Agencies yet to Respond to Government’s Request for Moratorium Period

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Most of the Donor Agencies yet to Respond to Government’s Request for Moratorium Period

July 30: The government has requested donor agencies for moratorium period due to its inability repay loan because of coronavirus pandemic but most of the donor agencies have not taken any decision in granting this facility to Nepal.

According to a highly-placed source at the Ministry of Finance, although Finance Minister Yuba Raj Khatiwada has been lobbying with the donor agencies to postpone the date of loan repayment,  only Japan has responded positively.

The finance ministry confirmed that Japan has agreed to extend the date of loan repayment without any conditions while other donors have only given assurance to the government.

Officials at the Ministry of Finance say that the government is liable to pay a total of Rs 23 billion to the donor agencies between mid-April to mid-December 2020.

The government has to pay Rs 1.88 billion, including loan and interest, to India during this period while the outstanding amount to China is Rs 550 million and Rs 160 million to Saudi Arabia.

Likewise, the government needs to repay Rs 10.83 billion to Asian Development Bank and Rs 6.97 billion to the World Bank as loan and interest.

According to the finance ministry, Japan has approved unconditional support to extend the time period for loan repayment by three years.

“No other donor agency besides Japan has given us any such facility,” said the source requesting anonymity.

With the commitment from Japan, the government will not face the burden or repaying Rs 780 million for the time being. Officials at the ministry say that the government has been trying to seek moratorium period from India as well but the southern neighbor has not responded yet.

Meanwhile, China has proposed certain conditions for similar request from the government of Nepal, informed the source. Although China has shown interest to extend the date for repayment of loan by 4 years, it has demanded interest for the period. The official said that the rate of interest charged by China is more than the rate charged by other countries. The source said that the government cannot accept the terms and conditions put forward by China.

 

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