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Debt Relief

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Global DEBT relief dashboard

Summary: Tracking global Chinese Debt Relief in the COVID-19 Era

The China Africa Research Initiative (CARI) Debt Relief Dashboard reports official information about global Chinese debt relief in the COVID-19 era, 2020-2021. Chinese debt relief falls into four categories: G20 Debt Service Suspension Initiative (DSSI), debt cancellation under the Forum on China Africa Cooperation (FOCAC), ad hoc debt relief, and contributions to the IMF’s Catastrophe Containment and Relief Trust.

Debt relief can involve renewal/refinancing (the outstanding balance of a loan is transferred to a new loan agreement), reprofiling/rescheduling (extending the repayment time, but not reducing the net present value of the debt – all DSSI treatments fall into this category), restructuring (changes in the terms that result in a reduction in the net present value) or debt forgiveness (reductions in the principal, which can be partial or complete). 

  • Four Chinese lenders have participated in debt restructuring so far:

    • The Export-Import Bank of China (Eximbank)

    • China Development Bank (CDB)

    • Industrial and Commercial Bank of China (ICBC)

    • China International Development Cooperation Agency (CIDCA)

  • G20 DSSI:

    • Two official Chinese bilateral creditors (Eximbank and CIDCA) have suspended over $1.3 billion in debt service in 23 countries worldwide under the G20 DSSI, including 16 African countries, according to Chinese officials.

    • Only four countries have officially released information on their G20 debt service suspensions from Chinese lenders: the Maldives ($25 million), Tajikistan ($40 million), Zambia ($110 million), and Kenya ($378 million). Angola also received an unknown amount of DSSI debt relief from China Eximbank.

  • FOCAC: Beijing claimed to have canceled interest-free loan debts due to mature at the end of 2020 for 15 African countries and promised to exempt African least developed countries’ debt incurred from interest-free loans matured at the end of 2021. Cancellations announced in Botswana, Burundi, Rwanda, Cameroon, the DRC, the ROC, and Mozambique total at least $113.8 million.

  • Ad hoc: Ecuador, which is not eligible for the G20 effort, received $891 million in repayment deferrals. Angola also received repayment deferrals from the China Development Bank (CDB) and the Industrial and Commercial Bank of China (ICBC), for a total of $4.9 billion. Kyrgyzstan, which is eligible for DSSI but has not formally participated, received an offer from China Eximbank to defer $35 million worth of loan repayments to 2022-2024.

  • Contribution to the IMF’s Catastrophe Containment and Relief Trust (CCRT): China contributed US$8 million to the IMF’s CCRT debt service relief program.

Version 1.6 – January 2021.

Modalities of Chinese Debt Relief

Debt Relief with Chinese Characteristics

China recently became the world’s largest bilateral creditor. In June 2020, CARI released a pre-pandemic study, “Debt Relief with Chinese Characteristics” (click here to browse our dataset of China’s debt relief from 2000 to 2019), charting China’s debt relief practices from the 1980s to 2019 with a focus on Africa. Since the pandemic, China’s debt relief has fallen into four distinct categories: (1) official bilateral creditor debt relief, as part of the G20 effort; (2) continued cancellation of interest-free loans that matured in 2020, under the FOCAC program; (3) ad-hoc debt relief provided by Chinese commercial banks; and (4) contributions to the IMF’s Catastrophe Containment and Relief Trust. The CARI Debt Relief Dashboard tracks all four categories, using open source data and interviews. Africa loan commitments in the Dashboard are from CARI data. Chinese President Xi Jinping stated in July 2021 that China has signed debt relief agreements with 19 African countries.

G20 Debt Service Suspension Initiative (DSSI) and the Common Framework 

In April 2020, China joined the G20 in launching the Debt Service Suspension Initiative (DSSI) to respond to debt and economic distress expected from the COVID-19 pandemic. The G20 effort allowed low-income countries that are not in arrears with the World Bank or IMF to apply for a suspension of interest and principal payments on their official bilateral external debt. This marks the first time China has joined a multilateral debt relief program. 

The DSSI suspension originally applied only to the last eight months of 2020 and required repayment of the suspended debt over three years, after a one-year grace period. In October 2020, the G20 extended the DSSI from January until June 30, 2021 and allowed these amounts to be repaid over six years, also with a one-year grace period. 

In November 2020, China and the G20 deepened their cooperation on debt relief by launching the Common Framework for Debt Treatments Beyond the DSSI. Through this framework, countries can apply for debt relief beyond the terms and time period offered by the DSSI. In April 2021, the G20 further extended the suspension period through the end of December 2021, and indicated that this would be the final suspension. All debt relief after 2021 will need to happen through the Common Framework. Only three countries have applied for the Common Framework so far: Chad, Ethiopia, and Zambia. 

Suspension is not automatic. It needs to be formally requested for each of the periods. Each time amounts need to be reconciled. Given constraints of the pandemic and capacity issues in developing countries, this process can take considerable time. Chinese officials reported in November 2020 that their two official bilateral creditors (Eximbank and CIDCA) had provided G20 DSSI relief to 23 countries worldwide, and in February 2021, that 16 African countries had benefited from China’s G20 DSSI relief. In May 2021, Zhou Xiaochuan, the former governor of the People's Bank of China, stated that China has provided more than US$1.3 billion in debt suspension under the DSSI framework. According to the Jubilee Debt Campaign UK, China has suspended $5.7 billion in debt, accounting for more than half of the world's total.

Forum on China Africa Cooperation (FOCAC) Debt Relief

Since 2000, Beijing has regularly provided debt relief for African countries under the triennial FOCAC by canceling interest-free loans that are due to mature in a particular year. In this vein, China pledged in June 2020 to again “cancel the debt of relevant African countries in the form of interest-free government loans that are due to mature by the end of 2020.” The pledge includes middle-income countries like Botswana that are not eligible for the DSSI. In February of 2021, Chinese officials announced that China had canceled interest-free loan debts due to mature at the end of 2020 in 15 African countries. This program is managed by CIDCA. In November 2021 Chinese President Xi Jinping announced that China will exempt African least developed countries’ debt incurred from interest-free loans matured at the end of 2021.

Ad-Hoc Debt Relief by Chinese Creditors

So far, the G20 programs only apply to official bilateral creditors. Although private creditors are encouraged to participate, there are no carrots and no sticks. Controversially, China has designated only the Export-Import Bank of China (Eximbank) and China International Development Cooperation Agency (CIDCA) as official bilateral creditors formally participating in the G20 effort. Yet other Chinese banks, such as the China Development Bank (CDB) and the Industrial and Commercial Bank of China (ICBC), have been implementing COVID-19 era debt relief outside of the G20 program. CDB claimed that it provided $748 million from June to September 2020 and $1.2 billion from January to June 2021 in debt relief to DSSI-eligible countries. 

China’s Contributions to the IMF’s Catastrophe Containment and Relief Trust

The IMF is providing two-year debt relief to its eligible low-income member countries under the Catastrophe Containment and Relief Trust (CCRT). The program is divided into four tranches of grants, each of which covers the IMF debt obligations of the recipient countries for the next six months of the grant issuance. The IMF started a fundraising campaign with a goal of US$1.4 billion to provide debt relief. In response to the IMF's request, China has contributed US$8 million to support the CCRT, joining the European Union, the UK, Japan, Germany, France, the Netherlands, Switzerland, Norway, Singapore, Mexico, Philippines, Sweden, Bulgaria, Luxembourg, and Malta.

Chinese Pledge on SDR Allocation

At the Forum on China Africa Cooperation (FOCAC) ministerial meeting in November 2021, Chinese president Xi Jinping said that China “is ready” to transfer $10 billion from its estimated $40 billion in newly allocated IMF Special Drawing Rights.

Global Debt Relief Dashboard

Africa

ANGOLA

DSSI negotiations were underway as early as June 2020, and preliminary agreements were allegedly reached in September with China Eximbank. Debt relief from Eximbank was on DSSI terms, although the amount is unclear (total DSSI savings from all bilateral creditors was reported to be approximately $500 million in 2020 and an equivalent amount in 2021). CDB and ICBC also agreed on debt restructuring. Angola will receive at least $4.9 billion in debt relief from CDB and ICBC from 2020 to 2023, according to the IMF. The latter agreements include "(i) a three-year deferral of principal payments; (ii) repayment of deferred principal falling due in 2020H2–2023H1 over seven years after the grace period, with some additional modest relief of principal in 2024–25." Angola has about $1.5 billion reserves in an escrow account with CDB and will use this to pay interest to the CDB in 2020-22. It appears that Angola will also continue to pay interest to ICBC; there is no mention of oil revenue escrow accounts for ICBC loans.

In August 2021, Angola was negotiating with China Eximbank for debt relief under the last phase of DSSI.

Botswana

In October 2020, China canceled Botswana’s debt of approximately $2.2 million (CNY15.6 million) from interest-free loans that were due to mature by the end of 2020. Botswana is not eligible for the G20 DSSI.

BURUNDI

In January 2021, China agreed to cancel Burundi $7 million (CNY50 million) interest-free loan that was due to mature by the end of 2020

Cameroon

In May 2021, China forgave Cameroon’s $19 million interest-free loan, which was presumably due to mature by the end of 2020. In 2019, China restructured part of its loans to Cameroon over the period 2019-2022. The Autonomous Sinking Fund of Cameroon confirmed that Cameroon received debt relief under DSSI, and media reports state that Cameroon has suspended around $75 million of debt payments to China under DSSI.

CHAD

Chad requested to participate in the DSSI in both 2020 and 2021. In January 2021, Chad became the first country to request debt restructuring within the G20 common framework. China, France, India, and Saudi Arabia formed a creditor committee and are still negotiating a debt relief Memorandum of Understanding with Chad as of January 2022. Pre-pandemic, Chad rescheduled arrears and upcoming maturities for three loans with China in April 2017. 

Democratic Republic of Congo

The Democratic Republic of Congo (DRC) has requested to participate in DSSI in both 2020 and 2021. In January 2021, Chinese Foreign Minister Wang Yi said that Beijing would write off interest-free loans to the DRC that matured at the end of 2020, worth around $28 million. 

Republic of Congo

In February 2021, China agreed to cancel its $14 million interest-free loans to the Republic of Congo that matured at the end of 2020. In June 2021, Chinese President Xi Jinping agreed in principle to reschedule the ROC’s debt under DSSI, and experts from the two countries will negotiate further details. ROC owes $2.4 billion (CFA Franc 1.3 trillion) to all Chinese creditors, of which $2 billion is owed to official parties, and $0.4 billion is owed to private and commercial parties. Pre-pandemic, China Eximbank rescheduled eight infrastructure loans to ROC in 2019.

Ethiopia

On January 14, 2021, Ethiopia’s Deputy Prime Minister and Minister for Foreign Affairs Demeke Mekonnen met with Zhao Zhiyuan, the Chinese Ambassador to Ethiopia, and asked China to provide debt relief to “some of” Ethiopia’s projects. On January 29, 2021, Ethiopia announced its plan to restructure its debt under the G20 Common Framework. Ethiopia's Creditor Committee under the Common Framework held its first meeting in September 2021. In 2018, China restructured some of Ethiopia’s loans, including the loan for the Addis-Djibouti railway. 

Kenya

Kenya did not apply for the first phase of the DSSI but applied for the second phase in November 2020. Kenya’s Central Bank governor Patrick Njoroge said Kenya deferred payments worth $600 million under the DSSI, including $378 million to China [Eximbank], from January 2021 to June 2021. However, according to the IMF, Kenya only deferred $425 million in loans from all creditors during this period. 

Kenya again requested debt relief from all its bilateral creditors under the last phase of DSSI (June to December 2021), but National Treasury Principal Secretary Julius Muia stated that China was reluctant to provide further relief under the last initiative.

Liberia

In February 2021, Liberia’s finance minister Samuel Tweah said Liberia and China are discussing options for debt relief. Liberia only joined the DSSI in late April or May 2021. Reuters reported that according to the IMF, Liberia’s Chinese debt was $54 million at the end of 2020, only 4.5 percent of its total external public debt of $1.2 billion, most of which is owed to multilateral institutions, including the World Bank.

Mauritania

Mauritania has been considering joining the G20 common framework beyond DSSI for debt restructuring since May 2021. The country’s advisor, Franklin-Finexem was scheduled to present a proposal on negotiation strategies by June 30, 2021. Mauritania’s total external debt stock amounted to US$ 5.3 billion in 2019. The country was able to save over US$200 million in repayments of its debt under the DSSI, of which Mauritania might have saved approximately US$48 million in its payments to Chinese official creditors.

Mozambique

Mozambique requested debt relief in October 2020. Mozambique could defer around $295 million in debt service payments to its creditors under DSSI, which is about 2% of its GDP. In March 2021, China canceled $37.5 million (CNY 244.6 million) of debt owed by Mozambique. The canceled debts are presumably interest-free loans due by the end of 2020. In 2017, Mozambique had reprofiled its Chinese loans.

Rwanda

Rwanda is eligible for the DSSI, but decided not to participate. In February 2021, China cancelled Rwandan debt from a $6 million interest-free loan.

Sierra Leone

In August 2020, Chinese Foreign Minister Wang Yi said that “China is ready to sign an agreement with Sierra Leone as soon as possible to implement the DSSI.” A March 2021 report reiterated that China had offered debt service suspension for the 2020 phase.

  • Loan commitments from Chinese financiers 2000-2019: $93 million; however, Sierra Leone has also guaranteed a loan of $165 million to an SPV set up by China Railway Engineering Corporation Group 7th Bureau (CRECG) to invest in a toll road built under a private public partnership (PPP). This could complicate debt relief negotiations.

TANZANIA

In January 2021, the Tanzanian President John Magufuli asked Chinese Foreign Minister Wang Yi to cancel three overdue interest-free loan debts. 

ZAMBIA

Zambia announced on February 5, 2021 that it had requested debt restructuring under the G20 Common Framework. Zambia previously requested DSSI treatment for both 2020 and 2021. The Zambian government and China Development Bank (CDB) reached a deal in October 2020 to defer interest and principal for a commercial loan facility insured by Sinosure: “The deferred interest payment is now payable on 25th April 2021 and the deferred principal rescheduled over the life of the facility.” Since Sinosure participated in the negotiation, it is likely that Zambia had already defaulted on loan payments to CDB. Zambian debt statistics showed an outstanding debt of $391 million to CDB, which accords fairly well with CARI data on CDB total loan commitments of $584 million (2000-2019). In November 2020, Zambian Secretary to the Treasury Fredson Yamba announced that under the DSSI, Zambia and China Eximbank reached a debt suspension agreement for $ 110 million worth of interest and principal payments due between 1 May and 31 December of 2020.

ASIA

Kyrgyz Republic

In April 2020, Kyrgyz Republic was in negotiations with China Eximbank for debt relief, according to its Deputy Prime Minister Erkin Asrandiyev. In November 2020, China Eximbank offered Kyrgyzstan a deferral deal to postpone $35 million loan repayments to 2022-2024, but apparently required a 2% fee of the deferred amount. It’s also possible that China Eximbank asked Kyrgyzstan to pay the interest during this period, since most of China Eximbanks’ loans to Kyrgyzstan appear to be at fixed rates of 2%. The deal was waiting for Parliament's approval. In March 2021, the President of Kyrgyzstan once again asked the Chinese President Xi Jinping for debt relief. Kyrgyzstan participated in DSSI in 2020 but left the program in 2021 even though it is still eligible.

LAOS

Laos has started discussions with Beijing to defer part of Laos’s total debt service payments for 2020. In 2020, Laos granted a 25 year concession to Electricite du Laos Transmission Company Ltd. (EDLT), a joint venture between the state power company Electricite du Laos (EDL) and the China Southern Power Grid Company which will build and manage the high voltage, export portion of Laos’ electric grid. Some reports speculate that this concession brought in funds that allowed Laos to pay debt service.

Tajikistan

Tajikistan requested debt relief under the DSSI and signed a Memorandum for a $40 million suspension agreement with the China Eximbank under DSSI in January 2021. Tajikistan is still seeking more debt relief from China.

  • China has suspended $32 million in debt (33% of outstanding debt service) in Tajikistan, according to Jubilee Debt Campaign UK.

THE MALDIVES

In November 2020, China Eximbank reduced Maldives' 2020 debt service from $100 million to $75 million under the DSSI, but rejected debt service suspension for a government-guaranteed loan provided to a private borrower for a luxury resort. In December, China's Ambassador to the Maldives, Zhang Lizhong, tweeted that China and Maldives had started further discussions on debt-related issues. In August 2021, the Maldives Foreign Minister stated that the Maldives was still receiving Chinese debt relief under DSSI, adding that the initial relief had not included Chinese loans to Maldives’ state-owned companies, but that they were “later included after discussion”.

PAKISTAN

China Eximbank has provided a total of $1.2 billion in debt relief for Pakistan under the three phases of DSSI, including $516 million for the third phase. . Chinese banks also renewed maturing commercial loans to Pakistan and its three-year bilateral currency swap with Pakistan to support Pakistan’s debt sustainability. Chinese lenders, including China Development Bank and Export-Import Bank of China, apparently refused to restructure terms for several Belt and Road power plant projects with Chinese investment.

  • China has suspended $263 million in debt (6% of outstanding debt service) in Pakistan, according to Jubilee Debt Campaign UK.

SRI LANKA

According to Sri Lanka’s secretary to the treasury, Sri Lanka requested debt relief from China Eximbank in 2020; China Development Bank reportedly increased a credit line by $700 million and “lowered the interest rate and delayed the repayment timeline by two years.” Sri Lanka is not eligible for DSSI.

EUROPE

Montenegro

In 2014, Montenegro took on a preferential export buyers credit of US$944 million at an interest rate of 2 percent over 20 years from China Eximbank for the controversial Bar-Bojole highway. After a six year grace period, 14 years of principal payments were due to begin in July 2021. In May 2021, Chinese President Xi Jinping apparently offered to extend the grace period for another 18 months in a discussion with Montenegro’s president Mila Djukanovic. However, given globally low interest rates, in July 2021, Montenegro instead secured a 14-year hedge deal in euros at 0.88 percent from Société Générale, Deutsche Bank, Merrill Lynch International, and Goldman Sachs International. Montenegro is not eligible for DSSI.

oceania

tonga

According to the IMF, “Tonga’s request for a suspension of 2020 debt repayments to the Eximbank under the DSSI has been approved, and the authorities intend to request the suspension of repayments coming due in the first half of 2021 as well.” According to the IMF, Tonga had also asked for unspecified debt relief from the Eximbank in December 2019, but as of February 2021 the request had not yet been approved.

  • China has suspended $7 million in debt (54% of outstanding debt service) in Tonga, according to Jubilee Debt Campaign UK.

VANUATU

Vanuatu and Chinese creditors reached a debt deferral agreement in 2020 for an unknown amount according to the Rhodium Group. Vanuatu is eligible for DSSI but did not  participate.

latin america

Ecuador

Ecuador received a new grace period on a loan with China Development Bank in August 2020, which allowed the postponement of $417 million in payments for one year. Ecuador's government also reached an agreement with China Eximbank to defer $474 million in payments between September 2020 and the end of 2021. Ecuador was not eligible for DSSI.

venezuela

In August 2020, Venezuela reportedly won a grace period until the end of 2020 from Chinese banks on some of its $19 billion in oil-secured loans, according to Reuters. This deferred $3 billion in 2020 loan repayments, mainly to China Development Bank. Venezuela was not eligible for DSSI.

Note: Africa loan commitments in the Dashboard are from CARI data.

Suggested Citation: Deborah Brautigam and Yinxuan Wang, “Global Debt Relief Dashboard: Tracking Chinese Debt Relief in the COVID-19 Era,” China Africa Research Initiative (CARI), Johns Hopkins University School of Advanced International Studies, Version 1.6, January 2021.

Click below to browse our dataset of China’s debt relief from 2000 to 2019.