The State Duma has restructured Abkhazia's debt
The State Duma of the Russian Federation today decided to restructure Abkhazia’s debt to Russia, which amounts to 1,7 billion rubles.
The debt arose as a result of non-repayment of a loan in the amount of 2 billion rubles, which Russia provided to Abkhazia in 2010 for the development of the railway.
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“When working on the project, we took into account two circumstances: firstly, the economic effect from the introduction of the Abkhazian part of the railway turned out to be lower than expected. Secondly, Abkhazia cannot withstand such payments without violating its social obligations to the population,” said First Deputy Chairman of the Committee on CIS Affairs Konstantin Zatulin.
According to him, Abkhazia’s payment capabilities will allow it to fulfill its obligations to the Russian Federation only if the annual amount of debt does not exceed 2 percent of the revenue side of the republican budget. Taking this into account, the Russian government proposed reducing the annual maximum payment amount from 368 million to 143 million rubles.
The State Duma allowed to reduce loan payments by increasing the repayment period of obligations by six years. However, debt restructuring does not provide for direct debt write-off.
The State Duma restructured Abkhazia's debt.