"The clearing problem that existed for many years has been resolved, and this gives a powerful impetus for the further development of bilateral economic relations," Serbia's Milan Parivodic said.
In September 2003, Russia, which took on the Soviet Union's entire foreign debt, signed a multilateral memorandum with the five successor countries of the former Yugoslavia on Soviet-era debt totaling $1.292 billion clearing dollars, and agreed on a clearing dollar rate of $0.625, giving the debt a total value of $800 million.
Parivodic added that the mechanism of debt settlement is in the interests of both countries.
He said part of Russia's debt - $188.3 million - will be liquidated in connection with Serbia's debt to Russian energy giant Gazprom [RTS: GAZP] for natural gas deliveries in 1994-2000.
Russia will invest another $100 million into a major reconstruction of the Djerdap-1 hydropower plant on the Danube River, including supplies of new equipment.
"Despite the fact that the signed agreements concern the settlement of old financial relations between Moscow and Belgrade, in their essence they are aimed to the future," Storchak said.
Storchak said bilateral trade in 2006 was $2.4 billion and that it continues to grow.
Storchak said earlier in April at a spring session of the International Monetary Fund (IMF) and the World Bank that Russia largely uses commodity deliveries for debt repayment.
"Where there is [the Yugoslavia successor countries'] debt to Gazprom, Russia uses an offset," he said, meaning Bosnia (to which Russia owes $170 million) and Serbia.