LONDON/JOHANNESBURG (Reuters) – Angola will receive $6.2 billion in debt relief over the next three years thanks to agreements lined up with three of its major creditors, the International Monetary Fund (IMF) said in a report released on Monday.
On Friday, Angola said it was close to striking debt agreements with a number of Chinese banks and government agencies.
The African oil exporter has buckled under a rising debt burden following a sharp decline in crude prices and amid the economic fallout from the coronavirus pandemic.
“Although debt is sustainable, significant vulnerabilities remain,” the IMF said in its report. “Debt dynamics are highly sensitive to further oil-price volatility.”
Angola owes more than $20 billion to a number of Chinese entities, including $14.5 billion to the China Development Bank (CDB) [CHDB.UL], and nearly $5 billion to the Export-Import Bank of China (EximBank) 2544.HK. It has also borrowed from China’s largest lender, ICBC.
While the IMF declined to name the creditors involved in the debt reprofiling deals, two private analysts following the negotiations said two of them were the CDB and EximBank.
Luanda struck a deal with one of its largest creditors, identified by the analysts as the CDB, in June, the IMF said. That agreement grants a three-year deferral of principal payments on three loans, with the largest one to be repaid over seven years thereafter.
An agreement with a second large creditor, identified by the analysts as EximBank, is being worked out with a similar reprofiling of principal payments, the IMF said in the report.
“The authorities have secured concrete and credible financing assurances from these creditors,” it said.
Meanwhile, discussions with a third creditor were ongoing, according to the report.
Source: Read Full Article