Cyprus had complied with all conditions set by international lenders for the first €3 billion of the €10 billion bailout to flowto Nicosia later in May, said the April 30 document, drawn up by the troika of the European Central Bank, the European Commission and the IMF.

Russia lent Cyprus €2.5 billion in 2011 for five years, with an annual interest rate of 4.5 per cent. Extending the loan and reducing the interest will ease debt servicing costs for Nicosia and help it regain financial stability.

"Reassurance has also been obtained from the Cypriot authorities that formal agreement has been reached between the Republic of Cyprus and the Russian Federation on an extension by two years of the maturity for the Russian loan, which will be reimbursed as of 2018, and a reduction of the interest rate from 4.5 per cent to 2.5 per cent," the document said.

Cyprus secured a three-year bailout from the euro zone's ESM bailout fund and the International Monetary Fund (IMF) last month, becoming the fifth country in the single currency area to seek euro zone financial help as a result of the sovereign debt crisis.

"All prior actions are now compliant both on substance and on procedure," the document said.(Reuters)

Source: Cyprus Mail