LONDON (Reuters) – Zambia confirmed on Thursday it had reached a debt restructuring deal with its official creditors, adding that it will now also seek to fast-track a deal with private creditors.
A French official who announced the deal earlier said that Zambia’s public sector creditors had agreed to reschedule payments of $6.3 billion and that private sector creditors are also expected to owe it. $6.8 billion to do the same.
Zambia’s President Hakainde Hichilema wrote on Twitter that the deal would help attract investment and create jobs.
Zambia’s finance ministry said in a statement that official creditors had agreed that local-currency debt would be excluded from the deal.
It also said that if Zambia’s debt sustainability improved, the terms of the agreement with official creditors could be adjusted, potentially leading to faster principal repayments and higher interest payments.
“This agreement marks an important milestone in Zambia’s continued efforts to strengthen the economy,” the statement said.
Hichilema was attending the French summit on Thursday and Friday. One of about leaders, the summit aims to reduce the debt burden of some of the world’s most vulnerable countries while freeing up billions of dollars of new money for climate finance.
Zambia seen as test case for bloc-backed debt restructuring framework Relief for countries in debt crisis.
But its restructuring talks are progressing slowly, except for a handful of other struggling governments seeking help under the Common Framework mechanism.