Weekly Report - 28 February 2013 (WR-13-08)

ECUADOR | Getting another Chinese loan. Ecuador’s finance ministry issued a statement on 26 February reporting that the China Development Bank had transferred it US$1.4bn, part of the US$2bn loan that the bank agreed with Ecuador last December. The statement explained that the government of President Rafael Correa had secured the eight-year loan, which has a 7% interest rate (with a two-year grace period), to finance its 2013 budget, which is now “completely funded”. The statement went on to add that this was the first instalment of the loan, which can be freely spent by the government. Meanwhile, the second, US$600m, instalment will be divided in two parts with US$300m to be destined for energy projects, and US$300m for other infrastructure development projects in the healthcare sector. With this loan China has consolidated itself as Ecuador’s main creditor, as the Andean country has repeatedly resorted to obtaining loans from its Asian partner ever since it decided to partially default on its foreign debts in 2008, and has sought to avoid resorting to international markets to raise funds.

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