Zambia has finally received a $1.3 billion loan from the International Monetary Fund (IMF) recently.
The loan has a grace period of five and a half years and a final maturity of ten years, reports Financial Post.
The development comes at a time when China is already responsible for almost 30 pc of Zambia's debt when compared to non-Chinese private creditors.
Terming it a great offer, Financial Post said that the IMF agreement means a lot to the other low-and middle-income nations who are taking Chinese loans.
Zambia has specifically stated that it will completely cancel 12 planned projects, half of which were expected to be funded by China EXIM Bank, along with one by ICBC for a university and another by Jiangxi Corporation for a dual highway from the capital.
Additionally, the government cancelled 20 of the unpaid loan sums, some of which were for brand-new projects and others for ongoing ones. Such cancellations are not unusual for Zambia, but the majority of these loans come from Chinese partners.
Ten of the cancelled loans are from China EXIM Bank; together with three other Chinese loans from ICBC (USD 303 million) and one from Jiangxi Bank (USD 157 million), these loans will save Zambia USD 1.1 billion over the next few years. The remaining six undistributed loan sums, totaling USD 483 million, are primarily from commercial lenders.
Some of these cancellations may have been initiated by Chinese lenders themselves, especially those in arrears.
The IMF's agreement permits the continuation of 62 concessional loan projects from 12 different lenders, the majority of which are managed by international institutions and once again include ongoing expenses as opposed to infrastructure-focused initiatives.