By Jorgelina do Rosario and Rachel Savage
LONDON/JOHANNESBURG (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.
(Reporting by Jorgelina do Rosario and Rachel Savage, editing by Karin Strohecker and Bernadette Baum)
