Irish Finance Minister Michael Noonan said on Friday his country will repay 9 billion euros (11 billion U.S. dollars) of the bailout loans it owed to the International Monetary Fund (IMF) by the end of the year.
"On Monday Ireland will inform the IMF of its intention to repay the first tranche repayment of approximately 9 billion euros," Noonan said.
"To facilitate an orderly settlement, the repayment will occur on two separate dates in December 2014. This transaction alone will save 750 million euros over the lifetime of the IMF loans and further enhance the sustainability of our national debt," he said.
Ireland recently secured agreement from the European Union (EU) to pay the IMF before it repays aid from the EU bailout funds.
When it was cut off from the markets in 2010, Ireland borrowed from the IMF, the European Financial Stability Facility (EFSF) and the European Financial Stability Mechanism (EFSM) a total 67.5 billion euros.
The December repayment will discharge all scheduled IMF principal repayment obligations that were originally falling due from July 2015 to July 2018. Subsequent repayments, planned for 2015, will target later repayment dates up to January 2021.
The Irish minister said he expected interest savings in excess of 1.5 billion euros to be achieved from early repayment of approximately 18 billion euros to the IMF.
The actual interest savings will depend on the timing and market rate paid on bonds issued to refinance the IMF loans once completed, he said.
"By reducing the interest bill on the national debt we reduce the amount of tax revenues & borrowing that go towards financing the debt," Noonan said.