Japan to write off Iraq debt

Japan has agreed to write off 80 per cent of debts owed to it by Iraq, paving the way for the resumption of Japanese financial aid and helping to speed up Iraq's negotiations with other creditor nations.

The Kyodo news agency, citing unnamed Government sources, says the write off covers 690 billion ($8.64 billion) of the US$7.3 billion ($10.71 billion) Iraq owes to Japan.

A formal agreement is expected by the end of the year, opening the way for Japan to resume loans of up to US$3.5 billion to help in Iraq's reconstruction.