China Eximbank provides RMB 96 million government concessional loan for Distance Learning Project

Project narrative

On May 30, 2012, the Government of Mozambique signed an RMB 96 million ($14.7 million) government concessional loan (GCL) agreement with China Eximbank for a Distance Learning Project. The loan carried a 20 year maturity, a 5 year grace period, and an unknown interest rate. Its first scheduled principal payment date is September 21, 2017 and its last scheduled principal payment (maturity) date was September 21, 2032. The loan's (principal) amount outstanding was $9,182,251 as of December 31, 2022. The project involves the creation of 45 distance learning centers. Its purpose is to help teachers to engage in distance learning activities while continuing to perform their teaching duties. ZTE is the contractor responsible for implementation. There are some indications that the China Eximbank loan for the Distance Learning 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).