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China-Angola Debt Restructuring Deal Close Says Senior Official

File photo. Chinese President Xi Jinping leads the way for Angola's President Joao Lourenco during a welcome ceremony outside the Great Hall of the People in Beijing on October 9, 2018. Lourenco is on a state visit to China. GREG BAKER / AFP

The Angolan government is reportedly close to finalizing a deal with Chinese creditors to restructure the $20.1 billion of debts that Luanda owes Beijing, according to an unnamed senior government official quoted by Reuters.

This is one of the first public acknowledgments from either the Angolan or Chinese governments that a debt deal is now close at hand. Last week’s announcement by the IMF that it would provide Angola with a $1 billion financing package provided another clue that the Chinese-Angolan negotiations were proceeding smoothly. Previously, the IMF had said that it would not provide additional financing to Angola until the government had reached a debt restructuring plan with Chinese creditors. The concern at IMF HQ in Washington, D.C. was that any new funds would simply be used to repay the Chinese.

Finance Minister Vera Daves (photo) also provided some new clarity at a press conference on Friday about the precise amount of debt that Luanda still owes Beijing. In total, she said, $20.1 billion of loans remain outstanding:

  • $10 billion was used to capitalize the state-own oil company Sonangol.
  • $10.1 billion was borrowed to build various infrastructure projects.

Of the $20.1 billion, about 75% is owed to the China Development Bank with the remainder due to the China Exim Bank, according to Reuters.

Minister Daves added that these various debt restructuring initiatives with Chinese institutions, the IMF, and other creditors will generate close to $6 billion in savings until 2023.

Angola is by far the largest recipient of Chinese loans in Africa, so if the two sides are able to successfully conclude a restructuring deal, it would go a long way to stabilize Beijing’s debt portfolio on the continent.

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