The state will try to refinance as much as $20 million in outstanding debt on the Federal City development in Algiers to take advantage of interest rates substantially lower than those available in 2008, when the state brought the project to the bond market.

The Industrial Development Board, the city agency that issued the bonds on the state’s behalf six years ago, approved a request Tuesday from the Division of Administration that would allow the state to return to the market sometime this year when interest rates become attractive enough.

The debt service on the bonds is being paid exclusively by the state, which hopes to save about $1.98 million over 13 years, from 2015 to 2028. The state would save close to $1 million in the first year and then average savings of about $85,000 per year after that.

The large savings in the first year would “give some budgetary relief to the state in the fiscal year that starts on July 1,” said David Wolf, an attorney for the IDB.

The Raymond James financial services company will serve as underwriter on the deal.

The state sold $25 million in bonds in 2008 to pay a portion of the cost of developing Federal City, the public-private, mixed-use development on the site of the former Naval Support Activity. About $21 million in debt remains outstanding on the project.

The state will try to refinance $17 million to $20 million of that amount. The debt, which will mature between 2019 and 2028, has current interest rates varying from 4.75 percent to 6.5 percent, Wolf said.

The state is hoping to refinance the bonds at interest rates between 0.3 percent and 3.25 percent, with an average of 2.7 percent. The new bonds would still be fixed-rate bonds. The refinancing would not extend the bonds’ maturation date, Wolf said.