Germany has accepted a Russian offer to repay debts of 1.3 billion euros ($1.7 billion) early under a wider Paris Club deal, Finance Minister Peer Steinbrueck's spokesman said on Saturday.
"We agreed that Russia will repay 1.3 billion euros of debt early at par," the spokesman said on the fringes of a meeting of finance ministers from the Group of Eight nations in St Petersburg.
Russia, flush with oil revenues, hopes to reach agreement to pre-pay $12 billion it owes to the lender group this month. But Germany - Russia's top creditor - is reluctant to accept early repayment of a further 6.4 billion euros it is owed by Moscow. That debt was used to back a German issue of 'Aries' credit-linked notes in 2004, and early redemption would leave Berlin out of pocket.
Russian Finance Minister Alexei Kudrin said he was hopeful of reaching agreement on the wider debt repayment within the next week or two, following up on a $15 billion repayment deal last year made at face value.
"We have assumed that Germany would be able to accept pre-payment of the part of our debts that is not linked to the Aries issue on last year's terms," Kudrin told reporters. The Paris Club holds a 50th anniversary meeting in mid-June.