France said on Saturday that Cuba has arrived at an agreement with its creditors to clear its debts that stem from a financial default it suffered back in 1986. 

Based on the agreement, 15 rich creditor nations of the so-called Paris Club will forgive $4 billion of late payment charges and Cuba will pay $2.6 billion of arrears over an 18-year period.

Details of the agreement have been announced in a statement by French Finance Minister Michel Sapin.

Sapin said that of the $470 million in principal and original interest payments that Cuba owes to France, $240 million will be repaid, while the rest will be converted into development projects for Cuba.

"This agreement opens a new era in the relations between Cuba and the international financial community," Reuters has quoted Sapin as announcing in the statement.

France is Cuba's main creditor. The statement did not specify the amount of principal that has been forgiven.

Earlier this month, diplomats said Cuba and its creditors will based on the emerging agreement restructure $16 billion in debt, with creditors expected to forgive most of the amount owed.

One diplomat said that Cuba had agreed to pay the principal of around $5 billion owed since its 1986 default in exchange for forgiving $11 billion in service charges, interest and penalties, with talks focused on how long Cuba would take to repay and how much of the money would be reinvested in Cuba.

Most of the creditors are willing to show flexibility due to their increased interest in doing business in Cuba following the Communist-run island's detente with the United States and continuing domestic reforms.