China, Ecuador sign $2bn loan agreement

China Development Corp has agreed to provide a US$2 billion loan to Ecuador, underscoring China’s growing role as the South American nation’s leading lender, the Wall Street Journal reported. The loan was signed in Beijing by Ecuador’s undersecretary of Public Credit, William Vasconez, China’s Finance Ministry said in a press release. While details of the agreement were not released, two weeks ago Ecuadorian officials said that the loan would be for eight years, with an interest rate of 6.9% and a two- or three-year grace period. China has become the biggest source of financing for Ecuador since it lost access to overseas capital markets following its default on US$3.2 billion of government bonds in 2008. Ecuador has also allowed China to invest in its oil and mineral resources.