The US International Development Finance Corporation has struck a deal that will help Ecuador repay billions of dollars in loans to China and boost development in exchange for excluding Chinese companies from its telecom networks, reported the Financial Times.
Adam Boehler, the chief executive of the US development bank, signed the deal in an event with Ecuadorean president Lenín Moreno on Thursday, calling it a “novel model” to eject China from the Latin American nation.
Under the agreement, the DFC will team up with private-sector financial institutions to help create a special purchase vehicle that will buy oil and infrastructure assets in Ecuador. The sale of the assets will provide Quito with cash to pay off the debt to China earlier than previously agreed — $3.5 billion will be outstanding after an upcoming repayment is made to Beijing — and also provide money to pump into various development projects, reported the FT.
“It is a novel approach that very strongly combines both missions of the DFC. The first is that we are going to impact development in Ecuador in a very positive way,” Boehler told the FT. “DFC was created was so that no single authoritarian country had undue influence over another country and we are addressing that factor with this agreement.”