TOKYO – Japan's government is finalizing plans to provide Pakistan with up to $1 billion in economic aid over the next two years, the Nikkei business daily reported Saturday.

The assistance would consist of yen loans and grant aid, and is aimed at helping poverty-stricken areas that could become breeding grounds for extremists, as well as finance infrastructure, education and job training, the Nikkei said.

Japan will announce the details on April 17 at a Pakistan donors conference in Tokyo that it is co-hosting with the World Bank, the paper said.

Pakistan has said it is seeking between $4 billion to $6 billion in aid pledges at the donors conference to fill a financing gap over the next two years.

The international community fears an economic meltdown in the nuclear-armed country could fan popular support for al Qaeda and other militant groups.

Participants at the conference are expected to agree to provide about $4 billion in aid to Pakistan over two years, the Nikkei said.

Japan had planned to chip in about 10 percent of that amount but will raise its contribution after the United States pledged annual aid of $1.5 billion, the paper said.

Pakistan has drawn up a list of projects worth $30 billion it would like to see implemented over the next 10 years.

The list includes hydro-electric dams and roads projects aimed at improving security in its violence-plagued northwest on the Afghan border.

In November, Pakistan got an emergency $7.6 billion International Monetary Fund loan to stave off a balance of payments crisis.

(Reporting by Chris Gallagher; Editing by David Fox)

Japan Pakistan