November 24, 2010 -- The government of Japan has written off 45% of the debt owed it by Seychelles and has rescheduled payment of the rest to start after a five-year grace period.

Seychelles total debt to Japan was equivalent to US $10.3 million. This has now been reduced to $6.6 million, payment of which will start in 2015.

An agreement taking immediate effect was signed yesterday by the new Japanese ambassador, Mr Toshihisa Takata, and principal secretary for Finance and trade, Mr Ahmed Afif.

Mr Takata said Japan, as a member of the Paris Club, has welcomed the progress made by Seychelles in putting its economy back on track.

Mr Afif thanked Mr Takata and the government of Japan for their generosity and for their support at the Paris Club to achieve the 45% face-value reduction of Seychelles' debt with the Paris Club countries.

"Today the debt of Seychelles has come down significantly, as a result of which the country and people will stand to benefit from a lesser burden on the balance of payments," said Mr Afif.