Mogadishu(Mogadishu24)-Denmark has canceled $17 million in debt owed by Somalia as part of the Heavily Indebted Poor Countries (HIPC) debt relief process, completed in December last year.

The Danish Embassy in Mogadishu confirmed the cancellation after a meeting between Danish Ambassador Steen Sonne Andersen and Somalia’s Minister of Finance, Bihi Iman Egeh.

“Denmark has canceled a total of $17 million in debt to Somalia and continues to be a strong supporter of Somalia’s economic reform efforts for a more prosperous Somalia,” the Danish Embassy said in a statement on X.

Somalia’s Minister of Finance, Bihi Iman Egeh, welcomed the decision and expressed gratitude for Denmark’s support. “It was a great pleasure to conclude the debt relief agreement with Denmark’s Ambassador following the successful Paris Club negotiations in March this year. We are grateful to Denmark for its valuable partnership in Somalia’s sustainable development,” Egeh said.

The debt relief highlights Denmark’s commitment to supporting Somalia’s economic reforms and fostering long-term development.

The debt cancellation comes two days after Danish Ambassador Andersen met with Somali Foreign Minister Ahmed Moallim Fiqi in Mogadishu to discuss recent diplomatic tensions. The meeting followed criticism over remarks made by Ambassador Andersen and other European Union envoys during Somaliland’s elections, which the Somali Federal Government deemed contrary to its territorial integrity.

Despite the diplomatic friction, the debt relief agreement underscores Denmark’s commitment to Somalia’s economic progress. This initiative is part of Somalia’s broader efforts to regain financial stability and attract international investment.

Somalia’s successful engagement in the HIPC process has enabled debt relief agreements with key partners, bolstering its reform agenda. Denmark’s gesture is expected to further support Somalia’s development goals and strengthen bilateral ties.