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Overview

Chinese Government cancels $17.12 million of the Government of Equatorial Guinea’s outstanding obligations

Commitments (Constant USD, 2023)$32,125,956
Commitment Year•2006Country of Activity•Equatorial GuineaDirect Recipient Country of Incorporation•Equatorial GuineaSector•Action Relating To DebtFlow Type•Debt forgiveness

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Jan 1, 2006
Start (actual)
Jan 2, 2007
End (actual)
Jan 2, 2007

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Funding agencies

Government Agencies

  • China Ministry of Commerce

Receiving agencies

Government Agencies

  • Government of Equatorial Guinea

Loan desecription

Chinese Government cancels $17.12 million of the Government of Equatorial Guinea’s outstanding obligations

Narrative

Full Description

Project narrative

In 2006, Li Zhaoxing, China’s Foreign Minister, traveled to Africa, visiting Chad, Benin, Mozambique, the Central African Republic, Equatorial Guinea and Eritrea. During this trip, he signed a debt cancellation agreement with the Government of Equatorial Guinea. Neither party disclosed the amount of debt that was forgiven. However, the IMF reported that the agreement forgave debts resulting from previously contracted interest-free loans (with maturity dates on or before December 31, 2005), reducing the Government of Equatorial Guinea’s outstanding debt obligations to the Chinese Government by approximately 50%. The IMF also recorded a reduction in the Government of Equatorial Guinea’s outstanding debt obligations to the Chinese Government — from $33 million in 2005 to $15.88 million in 2006. Therefore, AidData estimates the value of the debts that were forgiven as $17.12 million.

Staff comments

The debts that were written off through this agreement were almost certainly contracted before 2000, so AidData has not coded this project as an “umbrella project” (as there is little risk of double-counting loans that were contracted from 2000 onward).