The deal comes after months of negotiations between the Communist nation and the Paris Club, an informal group of developed creditor nations. The talks stem from Cuba’s lingering $16 billion debt which it defaulted in 1986.
The French Treasury, which heads the group, said in a statement the Paris Club “welcomed progress made by the Republic of Cuba towards the normalization of its relations with creditors and the international financial community.”
The group of creditor countries includes Australia, Austria, Belgium, Canada, Denmark, Finland, France, Italy, Japan, the Netherlands, Spain, Sweden, Switzerland and the U.K.
France, which is Cuba’s largest creditor, has agreed to have $240 million of the $470 million in principal and interest owed to be repaid, said French Finance Minister Michel Sapin. The rest will be converted into development projects in Cuba, Mr. Sapin said.
Cuba has recently made steps to re-engage with the international community. Last year, Cuba and the U.S. said they would normalize relations after decades of tension, though the U.S. has maintained its economic blockade against the island country.
Neither France nor the Paris Club detailed the amount of principal that has been forgiven.