Zambia wins deferral on China Development Bank loan repayments
Zambia has reached a deal to defer debt repayments that were due this month on a loan from the China Development Bank.
Zambia’s government did not give the size of the loan or the debt repayments that were due. But as of June 2019, Zambia owed CDB roughly $311 million, or about a tenth of the $3 billion of Chinese lending to Zambia. It was not clear whether the loan in question covers all of this debt or a fraction of it. China holds about a quarter of Zambia’s foreign debt.
Zambia, one of the world’s top copper producers, has been plunged into a debt crisis as the COVID-19 pandemic hurt its economy and exposed its public borrowing as unsustainable.
Holders of its Eurobonds are embroiled in a standoff with the government that the markets fear could trigger a default. One of the sticking points has been whether other key lenders such as China would also agree to reschedule repayments.
Zambia missed a $42.5 million coupon payment on one of its Eurobonds that was due on 14 October but has a 30-day grace period before it goes into default. The southern African country has asked Eurobond holders to defer interest payments until April 2021, but they have so far rejected the request.
Zambia’s external debt is nearly $12 billion, including $3 billion of outstanding Eurobonds, $3.5 billion of bilateral debt, $2.9 billion of other commercial debt and $2.1 billion owed to multilateral institutions.
