Ecuador inks deal with U.S. agency for up to $3.5 bln in financing
QUITO, Jan 14 (Reuters) - Ecuador has signed a deal with the U.S. International Development Corporation (DFC) that will provide up to $3.5 billion in funds to refinance debt and revive flagging industries, President Lenin Moreno said on Thursday.
The Andean country's liquidity problems worsened with the coronavirus pandemic, forcing the government to launch a bond swap last year and seek new loans from the International Monetary Fund and other multilaterals.
"The agreement is for the delivery of up to $3.5 billion to prepay expensive debt and reactivate the productive sector," Moreno said in a virtual press conference.
The funds could be used to prepay debt including the country's obligations to China.
Ecuador maintains long-term purchase and sale agreements with Chinese and Thai oil companies that were signed under former President Rafael Correa and whose financial conditions have been questioned by opposition politicians.
"The decision of the government is to maintain the best economic and political relations with all the countries of the world, including the government of China," said Economy Minister Mauricio Pozo in the press conference.
The funds will be available for eight years at a 2.48% annual interest rate, and will be disbursed based on the progress of the projects being financed, Pozo said.
Ecuador's public debt in November 2020 stood at about $60 billion, equivalent to 62.1% of GDP, according to official data.
The DFC was created in 2019 as part of an effort to boost U.S. commercial competitiveness abroad by financing investments in areas ranging from infrastructure and healthcare to agriculture and technology, according to its website.
(Reporting by Alexandra Valencia, Writing by Brian Ellsworth; Editing by Steve Orlofsky)
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