Russia officially forgives nearly $10 billion debt for North Korea

According to KBS, Russian President Vladimir Putin has just approved the decision to cancel 90% of the $10.86 billion debt that North Korea owes from the former Soviet Union.

In 2012, the State Duma (lower house of parliament) of Russia approved an agreement signed between Russia and North Korea that forgave most of this debt to Pyongyang. The remaining debt, about $1.09 billion, will be paid by North Korea in 6-month installments over 20 years and will be managed by the Russian National Development Bank.

Russian Prime Minister Dmitry Medvedev meets with late North Korean leader Kim Jong-il in Siberia in 2011. (Photo: AFP/Getty Images)

Under the deal, Moscow will use the remaining debt Pyongyang owes to invest in health, education and energy projects in North Korea. The Russian Finance Ministry said the money could be used to build a gas pipeline and railway to South Korea through North Korea.

Russia has long been trying to redirect gas exports from Europe to Asia, including plans to build a pipeline across the Korean peninsula to transport 10 billion cubic meters of gas per year./.

According to VNA