Russia cancels USD 4.5bn of Libya's debt

Moscow wrote off on Thursday Libya's USD 4.5bn debt in exchange for contracts for Russian companies worth several billions of dollars.

Source: Ria novosti
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The debt cancellation was part of an intergovernmental agreement on bilateral economic and financial relations signed by Russian President Vladimir Putin and Libyan leader Muammar Gaddafi.

After the signing ceremony, the outgoing Russian leader told reporters: "We are satisfied with the way we have resolved this problem. I am absolutely convinced that the scheme we have arrived at will benefit both the Russian and the Libyan economies, as well as the Russian and the Libyan people."

More than ten agreements were reached, including a contract for rail monopoly Russian Railways worth more than USD 2bn , Putin said.

Another major deal was closed between Russian natural gas giant Gazprom and Libya's National Oil Corporation to set up a joint venture to engage in both upstream and downstream oil and gas operations.

An agreement on military cooperation was also signed.

Russian Finance Minister Alexei Kudrin told reporters that the size of Libya's debt to Russia had been brought down by USD 100mn from USD 4.6bn to take into account Russian state bank VTB's debt to Libyan companies.

Russia's president arrived in Tripoli on Wednesday for a two-day visit. This evening he will leave for Sardinia, to meet with Italian president-elect Silvio Berlusconi.

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