Sunday, April 20, 2014

Russia writes off 90 percent of North Korea debt, eyes gas pipeline


Russia's parliament has agreed to write off almost $10 billion of North Korea's Soviet-era debt, in a deal expected to facilitate the building of a gas pipeline to South Koreaacross the reclusive state.

Russia has written off debts to a number of impoverished Soviet-era allies, including Cuba. North Korea's struggling communist economy is just 2 percent of the size of neighbouring South Korea's.

The State Duma lower house on Friday ratified a 2012 agreement to write off the bulk of North Korea's debt. It said the total debt stood at $10.96 billion as of Sept. 17, 2012.

The rest of the debt, $1.09 billion, would be redeemed during the next 20 years, to be paid in equal instalments every six months. The outstanding debt owed by North Korea will be managed by Russia's state development bank, Vnesheconombank .... http://www.reuters.com