Kyrgyzstan: Russia Cancels Debts, But Credit Pile Remains High
Kyrgyzstan has for some time been barreling toward a sovereign debt crunch, but lucky for it, Russia has just wiped $240 million off the slate.
Russian Prime Minister Dmitry Medvedev on May 3 approved a decree cancelling historic debts worth that amount.
The money in question stems from a loan issued in February 2009.
At the time, Kurmanbek Bakiyev was president of Kyrgyzstan and he had bagged a $2 billion credit deal that included $1.7 billion that was to be spent toward paying Russian companies build Kambar-Ata hydropower station station on the Naryn River — a project that has since hit the buffers. Another $300 million were lent on highly preferential conditions — 0.75 percent per annum to repaid within 40 years. Another $150 million were given as a grant.
The largesse was viewed universally at the time as a giveaway in exchange for Bakiyev agreeing to kick US troops out of the air transit base outside the capital, Bishkek. In the event, Bakiyev welched on the deal, only to then be deposed in a popular uprising that Moscow tacitly supported.
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