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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

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Ecuadorean President Guillermo Lasso has turned to multilateral organisations for financing to reactivate the pandemic-hit economy, and renegotiated a US$6.5 billion credit agreement with the IMF, which ends this year. Photo: Shutterstock Images

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.

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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.

China has become Ecuador’s main financial partner in the past decade.

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.

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