China Eximbank provides RMB 150 million loan to Electricidade de Moçambique, E.P.

In 2014, China Eximbank issued an RMB 150 million to Electricidade de Moçambique, E.P., a state-owned enterprise in Mozambique that is responsible for electricity generation and distribution. It is not clear whether, when, or how the proceeds from this loan were used. However, there are some indications that the China Eximbank loan may have financially underperformed vis-a-vis the original expectations of the lender. In 2016, several credit rating agencies downgraded the Government of Mozambique to 'selective default' or 'restricted default' status, and the World Bank and the IMF re-classified Mozambique's external debt as 'in distress.' In January 2017, the Government of Mozambique defaulted on a coupon payment for its dollar-denominated Eurobond. Then, in February 2018, the International Monetary Fund (IMF) announced that the Government of Mozambique had accumulated $710 million in arrears to external creditors and had agreed to reschedule some bilateral debt service payments with the Chinese Government. Two months later, in April 2018, Stelia Neta, a National Director at the Ministry of Finance of Mozambique revealed that the Government of Mozambique’s outstanding debt obligations to the Chinese Government amounted to $2.02 billion and the Chinese Government had agreed to extend the grace periods (and first principal repayments) on these outstanding debt obligations without changing their final maturity dates or interest rates (as captured via Project ID#66283).

Number of official sources

2

Number of total sources

4