In a deal expected to facilitate the building of a gas pipeline between the two nations, Russia’s parliament has agreed to write off nearly $10 BILLION of North Korea’s Soviet-era debt. As of late 2012, the North Korea’s debt to China stood at $10.96 BILLION. The outstanding debt, managed by Russia’s state development bank, Vnesheconombank, is scheduled to be paid back within the next 20 years.
Russia’s Deputy Finance Minister SERGEI STORCHAK told Russian media that the money could be used to fund mutual projects in North Korea, including a proposed gas pipeline and a railway to South Korea.
The international community has been seeking to re-engage with North Korea amid hopes that the reclusive state’s government would seek ways to end years of isolation and poverty.
Russia’s state-owned top natural producer, Gazprom, has long planned to build a gas pipeline from North Korea to South Korea in hopes of annually transporting 10 BILLION cubic meters of gas.
Moscow has been trying to diversify its energy sales to Asia away from Europe, which wants to cut its dependence on oil and gas from Russia. After a decade of talks, Moscow aims to reach a deal to supply gas to China.
~ MERIT FREEMAN