WASHINGTON, Aug 1: The United States released $1.1 billion to Pakistan from the Coalition Support Fund hours after the two countries signed a Memorandum of Understanding in Islamabad for regulating Nato supplies to Afghanistan.

The fund is used to reimburse Pakistan for the cost of counter-insurgency operations along the Afghan border. The Obama administration had been holding up the money over the past six months as Pakistan closed the supply routes after the Nov 26 US air raid that killed 24 Pakistani soldiers.

The MoU will be effective till December 31, 2015, and could be extended for one year after consultations.

Earlier, key US lawmakers supported CSF reimbursement for Pakistan, saying that the reopening of Nato supplies routes had earned Islamabad the right to receive reimbursements.

“This is not supposed to be a gift, this is supposed to be a reimbursement,” he explained.