China Eximbank provides $13.8 million loan for Acquisition of Control Equipment Project

Project narrative

On December 16, 2009, the Government of Mozambique ratified a $13,800,000 loan agreement with China Eximbank for the Acquisition of Control Equipment Project. The borrowing terms of the loan are unknown. The purpose of this loan was to facilitate the acquisition of “control equipment” for Mozambique’s Ministry of Interior. It is unclear whether this project reached the implementation stage. There are some indications that the China Eximbank loan for the Acquisition of Control Equipment Project 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 Record ID#66283).