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Ecuador signs deal to delay $474 million payment to China's ExIm Bank

·1 min read

QUITO, Sept 16 (Reuters) - Cash-strapped Ecuador has reached a deal to delay a looming $474 million loan payment due this year and next year to China's state-controlled and trade-focused ExIm Bank until 2022, the South American country's government said on Wednesday.

Ecuador is restructuring its foreign debt after the plunge in the price of oil, the country's main export, hit government revenue earlier this year. Ecuador reached a deal in August with the China Development Bank, another state lender, to delay a $417 million payment by a year.

It also reached a deal to exchange some $17.4 billion owed to bondholders into new bonds with later maturity dates.

"We have reprofiled the debt with ExIm Bank," President Lenin Moreno wrote on Twitter. "We have now renegotiated $891 million with Chinese banks. We continue reducing strain on public finances, and attracting more resources."

During the boom in oil prices in the past two decades, Ecuador took on billions of dollars in loans from Chinese financial institutions. But as the price of oil collapsed in recent years, the South American country has struggled to pay off its debts.

Ecuador's bilateral debt to China currently exceeds $5 billion, official figures show.

The deal announced on Wednesday delays payments on four credits granted to finance hydroelectric dams during former President Rafael Correa's tenure, some of the largest Ecuador received from China's ExIm Bank, the Finance Ministry said in a statement.

The ministry added that capital repayments would resume in March 2022 and that the country would finish paying by 2029. (Reporting by Luc Cohen; Editing by Peter Cooney)