The cabinet has ignored the Public Procurement Regulatory Authority’s (PPRA) concerns regarding the Inter-Governmental Framework Agreement between the Government of Pakistan and Denmark while finalizing the final draft of the agreement, revealed sources.
PPRA was concerned that the agreement will only benefit Danish suppliers and not the Pakistani economy. The step is taken on the request of the Danish government after a gap of three years and to extend the economic cooperation in numerous other sectors.
The framework was discussed between both governments on 5 August during a meeting between the Ambassador of Denmark to Pakistan, Lis Rosenholm and Federal Minister for Economic Affairs, Sardar Ayaz Sadiq. Both parties, after a week’s negations, signed the agreement on 10 August during a signing ceremony at the Ministry of Economic Affairs. Secretary Ministry of Economic Affairs, Muhammad Humair Karim, and Ambassador of Denmark to Pakistan, Lis Rosenholm, signed the agreement.
The ambassador had said that the framework agreement is a strategic agreement that would further open numerous possibilities to identify more areas of cooperation. She put special focus on collaboration in areas including climate change, water waste management, renewable energy, and green infrastructure.
This agreement offers the Danida Sustainable Infrastructure Finance (DSIF) Facility by the Danish side which would provide interest-free but tied loans up to but not limited to €100 million aimed at the transfer of technology and know-how.
The interest-free loans have a 35 percent concessional element covering the interest on the loan, export premium, bank margin, and an upfront grant if these expenses do not arrive at 35 percent of the contract amount. The loans would have a 10-year maturity period generally and 15 years can be accommodated in exceptional cases.
Sources claim that the agreement has been approved by the cabinet with the benefits limited to Danish suppliers only. In addition, there was no active development cooperation going on between the two countries since 2017. Therefore, this Framework Agreement marked the beginning of a new chapter of economic relations between the two countries, said sources.
