The funds will be used for the repayment of 1.3 billion kuna in debt service liabilities, mainly from the London and Paris clubs of creditors (590 million kuna) and towards euro and samurai bonds (390 million kuna).
These liabilities were settled in January and February this year, for which the government took out a short-term loan, Suker said.
The minister said that 820 million kuna would be used for the purchase of foreign exchange assets to service the liabilities due in March, while the rest of the funds would be used to settle the domestic public debt which becomes due this year.
Five hundred million kuna will be used to cover the current account deficit until planned revenue from privatisation is generated.
"This bond issue will not increase the foreign debt," Suker said.
Bonds will be issued on March 8 and will be listed on the Zagreb and Varazdin stock exchanges on March 9.
(1 euro = 7.5 kuna)