The US confirmed on Friday that it has assisted Sudan with more than $1 billion to help clear arrears at the World Bank as it hailed reforms by the civilian-backed government.

A boy stands next to a donkey loaded with jerry cans by the Atbarah river near the village of Dukouli within the Quraysha locality, located in the Fashaqa al-Sughra agricultural region of Sudan's eastern Gedaref state on March 16. Photo: VCG

Following the announcement, the Washington-based development lender and the IMF said in a joint statement that Sudan could now be eligible for relief on its nearly $50 billion in external debt under the Enhanced Heavily Indebted Poor Countries program.

"This is a breakthrough at a time when Sudan needs the world's help to support its development progress," World Bank President David Malpass said. "The steps taken so far, including arrears clearance and exchange rate unification, will put Sudan on the path to substantial debt relief, economic revival and inclusive development."

US President Joe Biden's administration said it carried out a financing deal signed in January by the previous treasury secretary, Steven Mnuchin, during a trip to Sudan, which has faced unrest over the past several years due to the dire economic situation.

The Treasury Department on Thursday provided Khartoum with $1.15 billion in bridge financing, typically loans that cover short-term needs. No US taxpayer money was involved.

"Sudan's civilian-led transitional government deserves credit for making challenging but necessary reforms to restore its social contract with the Sudanese people," said Treasury Secretary Janet Yellen, Mnuchin's successor.

Prime Minister Abdalla Hamdok, a British-educated economist, has been seeking ways to end conflicts and rebuild economic opportunities.