Angola and Chinese lenders are discussing making changes to repayments on loans made to the southern African country, but those “adjustments” will not be a debt restructuring.
“Relevant Chinese financial institutions have held friendly talks with the Angolan side on issues such as adjusting the financing cooperation and repayment guarantee mechanism between the two sides,” Chinese foreign ministry spokesperson Lin Jian said at a regular press conference on Wednesday.
“Positive progress has been made, and it is believed that a plan satisfactory to both sides can be reached. These adjustments are not debt restructuring, and Angola has indicated that it is fully capable of continuing to repay financial institutions on time.”
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Angola will pay up to USD 200 million less each month towards a reserve to service loans with the China Development Bank (CDB), its biggest Chinese creditor, an Angolan minister said at the conclusion of a visit to China last week.
The oil producing country owes Chinese creditors about USD 17 billion, its president, Joao Lourenco, said during the trip, almost 40% of its external debt. Its international debt payments jumped last year after a debt service suspension deal with Chinese lenders ended, contributing to its kwanza currency weakening and inflation climbing.
Angola has USD 2.5 billion in escrow accounts to repay Chinese creditors, credit ratings agency S&P Global Ratings said last month. In 2022, S&P estimated that 80% of debt to Chinese lenders was in oil-backed loans.
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Jose de Lima Massano, Minister of State for Economic Coordination, told reporters at the end of a trip to China that the “repayment mechanics” of the loans to CDB will be changed, but not the timetable.
“Some of the (Chinese-funded) projects are at a stage where a longer period is needed for repayments,” Massano said. “These periods have been extended, which means that we can continue to carry out the projects with the security of having the funds available to pay the contractors.” He added that Angola had not defaulted on any Chinese loans, promoting trust between the two sides.
Angola expects to repay CDB USD 3.1 billion in loan amortisations in 2024, according to the government’s annual debt plan. In total, it forecasts payments of USD 10.1 billion to external creditors this year.
