YANGON, Burma (AP) — Germany has signed an agreement to forgive half the 1.084 billion euro ($1.48 billion) debt it is owed by Burma, implementing a plan which Germany and other creditor nations accepted a year ago.

The state-owned Myanma Ahlin newspaper reported Tuesday that the agreement was signed the previous day in Burma’s capital, Naypyitaw, during a state visit by German President Joachim Gauck, the first by a German head of state in 26 years. Germany’s finance and development ministries confirmed the signing.

The Paris Club of 19 mostly Western creditor countries agreed in January last year on a debt forgiveness formula to help stabilize Burma’s economy as the country transitions to democracy after five decades of military rule.

Monday’s agreement also calls for the remaining 542 million euros ($740 million) in debt to be paid back within 15 years at 3 percent interest, Myanma Ahlin reported.

Burma accumulated $8.4 billion in foreign debt during the socialist regime of the late Gen. Ne Win from 1962 to 1988, and $2.61 billion under the military junta that took over in 1988 and yielded power to an elected government in 2011. Current President Thein Sein instituted political and economic reforms after coming to office to help the country’s ailing economy.

The breakthrough in dealing with the country’s external debt problem came in January last year, when Japan agreed to provide a bridge loan to Burma to cover outstanding debt to the World Bank and the Asian Development Bank, totaling about $900 million.

Norway has committed to a complete cancellation of claims to money owed by Burma.