Zambia says EximBank to represent Chinese lenders in debt talks

Jiangxi Bank

03/11/2022 11:26

(Updates with details on Zambia's debt with China, Ethiopia's
debt talks and charts)
    By Jorgelina   do Rosario and Rachel Savage
       LONDON/JOHANNESBURG, Nov 3 (Reuters) - The Export-Import
Bank of China (EximBank) will lead Beijing's team to renegotiate
nearly $6 billion of loans that Zambia owes to Chinese
state-owned creditors, the country's finance ministry told
Reuters on Thursday.
    EximBank, one of Beijing's three policy banks and Zambia's
single largest Chinese creditor, is the linchpin in China's Belt
and Road Initiative (BRI) that oversees infrastructure lending.
    "Negotiations with the committee are progressing well and
the IMF/World Bank DSA (debt sustainability analysis)
assumptions are one of the subjects under discussion," the
finance ministry said in a statement to Reuters.
    China is Zambia's largest bilateral creditor, accounting for
75% of what the country owes to nations, including France and
India.
    Creditors and investors are closely monitoring how China,
the world's largest bilateral lender, is managing debt
negotiations around the world. China has tended to offer debt
relief by extending maturities rather than accepting writedowns
on loans. 
    EximBank did not respond to a request for comment.
    China and France agreed earlier this year to co-chair an
official creditors committee to renegotiate Zambia's bilateral
debts but had not yet specified who would represent each
country.
    EximBank said in a statement on its website on Wednesday its
vice president Zhang Wencai has discussed the Common Framework
and debt issues with French Treasury officials during a recent
visit to Paris, without providing any further details.          
 
    The policy bank has extended to Zambia more than half of
Chinese loans while a $982 million loan was made jointly with
the Industrial Commercial Bank of China (ICBC).
    Western countries last month pointed to China as the
principle obstacle for many nations unable to service their debt
to moving ahead with debt-restructuring deals.                  
  
    Ecuador announced in September it had agreed with China
Development Bank and EximBank to extend maturities and reduce
the amortization on $3.2 billion of loans.
    Zambia said last month it was eager to accelerate debt
restructuring talks with creditors under the Common Framework, a
Group of 20 major economies initiative that has been criticized
for slow results. Lusaka's administration is expecting to
present a first restructuring proposal to official creditors
before year-end.
    Including commercial lending, Zambia government data showed
it owed more than a third of its $17.27 billion external debt to
Chinese lenders by end-2021. This includes loans from Jiangxi
Bank  1916.HK  and China Minsheng Bank  600016.SS .
    EximBank-funded projects in the copper-rich nation range
from roads and hydropower plants to military barracks and
stadiums.
    The bank also leads China's team in Ethiopia's bilateral
debt talks, its state finance minister told Reuters last month.
EximBank committed to extending $7.7 billion across 31 loans to
Ethiopia between 2007-2018, according to a Boston University
database of Chinese lending to Africa. That is around half of
all Chinese lending pledged to Ethiopia since 2006.
    In 2018, EximBank agreed to extend repayment on a loan worth
at least $2.5 billion for a railway between Addis Ababa and
Djibouti by 20 years.
    Ethiopia's Common Framework debt negotiations are delayed
partly due to the civil war, though government and regional
forces from Tigray agreed on Wednesday to cease hostilities in a
diplomatic breakthrough.
    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Zambia's road to debt talks    https://tmsnrt.rs/3DvdZ9L
Zambia and China: a $6 billion debt talk     https://tmsnrt.rs/3h5XLwt
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Reporting by Jorgelina do Rosario and Rachel Savage,
additional reporting by Ziyi Tang in Beijing and Chris Mfula in
Lusaka, editing by Karin Strohecker, Bernadette Baum, Kirsten
Donovan)
 ((jorgelina.dorosario@thomsonreuters.com;))