The Paris Club has agreed to cancel the $1.026 billion debt owed to it by Afghanistan, a press release published on the site of the informal financial group on Wednesday said.

"As a contribution to restoring the Islamic Republic of Afghanistan's debt sustainability, Paris Club creditors decided to cancel $441 million, which represents the Paris Club's share of the effort in the framework of the enhanced HIPC Initiative," the statement said.

In addition, the members committed to providing a further $585 million in relief to Afghanistan on a bilateral basis, bringing the total figure to 100% of the country's Paris Club obligations.

The Paris Club is an informal grouping of the world's richest countries, which provides financial services such as debt restructuring, debt relief, and debt cancellation to indebted countries.

"Creditors welcome and support the Islamic Republic of Afghanistan's commitment to seek comparable treatment from all their other external creditors," the press release said, adding that the member nations that participated in the restructuring of Afghanistan's debt were Russia, Germany and the United States.

The World Bank, the International Monetary Fund and creditor nations agreed at the start of the year to provide a $1.6 billion debt relief to Afghanistan. The decision to cancel all these debts is seen as recognition of the progress Afghanistan has made in strengthening its economy.

MOSCOW, March 17 (RIA Novosti)