Rwanda and China have signed agreements where the Asian country will provide Kigali with a grant worth $60 million (Rwf59.5 billion).
The agreements signed on Friday, February 19 also saw the Asian country cancel its $6 million (Rwf5.9 billion) loan to Rwanda.
The debt relief will now allow Rwanda-whose economy is challenged by the Covid-19 pandemic-to channel the resources meant to service debt into other activities.
"(It) will free some resources that were otherwise going to be used for debt payment," Uzziel Ndagijimana, the Minister of Finance and Economic Planning said, adding that the grant will be used for a priority project to be agreed upon.
"We appreciate this support by the Government of the People's Republic of China during these challenging times caused by Covid-19 pandemic," he added.
Ndagijimana said China has been supportive of Rwanda in major sectors of development, mainly: transport, agriculture, health, education and energy.
According to Rao Hongwei, the Ambassador of China to Rwanda, China hopes that by extending the new financial support, to make contribution to Rwanda's all-round transformation and recovery from the maligning impact of the Covid-19 pandemic.
Rwanda and China are time-tested friends, partners, and brothers and sisters, he added.
Since Chinese President XI Jinping's historic visit to Rwanda in 2018, the ambassador noted, there has been a significant improvement in the bilateral relationship between the two nations.
"The comprehensive cooperation between the two countries, especially in the economic field, has been tremendously diversified and intensified," he said. "In these times of major new opportunities and challenges, we are ready to work with Rwandan friends to forge new opportunities out of crises, make new advances amid changes, and build an even more glorious tomorrow for China-Rwanda relation."