Chinese Government cancels RMB 213 million of the Government of Burundi’s outstanding debt obligations

On May 25, 2007, the Chinese Government and the Government of Burundi signed an agreement on the remission of the Government of Burundi’s outstanding debt obligations to the Chinese Government. This debt forgiveness agreement reportedly eliminated all of the Government of Burundi’s outstanding debt obligations. The debts that were forgiven resulted from interest-free Chinese Government loans that the Government of Burundi previously contracted.

Additional details

The IMF and SAIS-CARI record the amount of debt forgiveness that was provided as $13.7 million and $15 million, respectively. However, since the Chinese Government forgave the Government of Burundi’s outstanding debt obligations resulting from interest-free loans that it previously contracted, and interest-free loans from the Chinese Government are almost always denominated in RMB, AidData treats RMB 213 million as the value of the debt that was forgiven. China made a concerted effort in 2007 to forgive the debt from interest-free loans maturing by the end of 2005 to heavily-indebted African countries (http://kp.china-embassy.org/chn//zgxw/zgzxxw/t293317.htm). Since interest-free loans usually have 20 year maturities (http://www.gov.cn/zwgk/2011-04/21/content_1850553.htm), we have assumed the loans included in this debt forgiveness package would have been contracted before 2000. As such, this project is not marked as umbrella, as there is little risk of double counting.

Number of official sources

7

Number of total sources

15