Ecuador reaches deal with Chinese banks to restructure debt, providing US$1.4 billion relief until 2025
- President Guillermo Lasso previously announced he sought to restructure debt and improve conditions of long-term oil sales contracts with Beijing
- Ecuador also managed to reduce certain applicable interest rates and suspend all amortisations with China Eximbank for a six-month grace period
Ecuador has reached an agreement to restructure its debt with Chinese banks, the government said in a statement on Monday, providing debt relief worth some US$1.4 billion until 2025.
Ecuador’s President Guillermo Lasso announced in February that he was looking to restructure the country’s debt and improve the conditions of long-term oil sales contracts with Beijing.
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Agreements were reached with both the China Development Bank and the Export-Import Bank of China (Eximbank) for loans worth US$1.4 billion and US$1.8 billion respectively, extending the loans’ maturity and reducing amortisation.
“As a result of these agreements, the maturities are extended to 2027 for China Development Bank and 2032 for Eximbank, allowing the cash-flow relief to support government priorities,” the president’s press team said in the statement.
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Ecuador also managed to reduce certain applicable interest rates and suspend all amortisations with China Eximbank for a six-month grace period, the government said.
The loans were agreed during the government of former president Rafael Correa, while several were linked to long-term oil sales contracts with Chinese companies.
The agreements also involve freeing up certain amounts of exports to Chinese oil company CNPC under oil-backed contracts, allowing Ecuador to sell an unspecified quantity of oil at market prices, the statement said.
State-owned energy company Petroecuador reached an agreement with PetroChina last week on a number of crude oil deliveries.
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The Wall Street Journal first reported on Monday that Lasso had announced a deal with China to restructure US$4.4 billion worth of debt.
