Ecuador reached an agreement with China to restructure debt According to Reuters

© Reuters. FILE PHOTO: Ecuadorian President Guillermo Lasso speaks during the Second Plenary of Leaders during the Ninth Summit of the Americas in Los Angeles, California, U.S., June 10, 2022. REUTERS / Lauren Justice / File Photo / File Photo

(Reuters) – Ecuador has reached a debt restructuring agreement with Chinese banks, the government said in a statement on Monday, providing about $1.4 billion worth of debt relief through 2025. .

In February, Ecuadorian President Guillermo Lasso announced that he was seeking 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 over the past decade.

Agreements have been reached with both the China Development Bank and the Export-Import Bank of China (Eximbank) for loans worth $1.4 billion and $1.8 billion, respectively, extending maturities. loan maturity and amortization.

“As a result of these agreements, maturity is extended to 2027 for China Development Bank and 2032 for Eximbank, allowing cash flows to ease to support government priorities.” , the president’s press team said in the statement.

The government said Ecuador also attempted to reduce some applicable interest rates and halted all allocations with China Eximbank during a six-month grace period.

The loans were agreed under the government of former President Rafael Correa, while some were related to long-term oil sales contracts with Chinese companies.

The deals also involve the release of certain exports to Chinese oil company CNPC under oil-backed contracts, allowing Ecuador to sell an unspecified amount of oil at market prices. , the statement said.

State-owned energy company Petroecuador reached an agreement with Petrochina last week for a number of deliveries.

Since taking office last May, Lasso has turned to multilateral institutions to provide financing to reactivate Ecuador’s economy, which has been ravaged by the coronavirus pandemic, and renegotiate the deal. $6.5 billion in credit with the International Monetary Fund, ending this year.

The Wall Street Journal first reported on Monday that Lasso had announced a deal with China to restructure $4.4 billion worth of debt.

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