Ecuador totals financial relief for USD 891 million with China
In the context of the comprehensive debt renegotiation, Ecuador reached another important agreement with Eximbank, which will allow financial relief of USD 474 million during the remainder of 2020 and 2021.
This rescheduling is in addition to what was achieved with China Development Bank (CDB), on August 5, 2020, in order not to make payments to that bank for the next 12 months for USD 417 million. Consequently, the capital relief between these two operations amounts to USD 891 million.
Minister Richard Martínez pointed out that “this is one more step within the virtuous circle of trust that the international community has placed on Ecuador, and, in this particular case, on bilateral partners such as China. The country is giving a clear message to the world on how to move towards a debt sustainability mechanism ”.
“These decisions are complemented by the arrival of more resources to continue with the relief that the Ecuadorian economy needs,” he said.
The agreement allows rescheduling the principal payments corresponding to the four largest loans in the loan portfolio with Eximbank, which represent 84.2% of the total debt, and which financed the projects Coca Codo Sinclair, Paute-Sopladora, Minas- San Francisco and 500kw Transmission Line.
Ecuador expected amortizations of USD 158 million in the remainder of this year and USD 316 million in 2021 for the four loans to Eximbank. These payments are reduced to zero in this period.
In addition, it has a 16-month grace period on the capital, without the original conditions being altered. In this sense, the
weighted average rate of these four operations is 6.44%.
Principal payments will resume in March 2022, and will be distributed proportionally over the term of the four loans, that is, between the years 2025 and 2029. (I)