On January 14, the Ecuadorian government signed a framework agreement with the United States International Development Finance Corporation (DFC). The agreement allows Ecuador to receive up to USD 3.5 billion in funds to service its prior debt commitments (with high rates and short terms), to achieve a “new debt with better conditions”. The funds are expected to be disbursed in the short term.
The Minister of Finance, Mauricio Pozo, explained that part of the DFC loan has an annual interest rate of 2.4% for a period of eight years and a year’s grace period, would enable the Treasury to make advance payments for its oil pre-sales obligations with Asian companies.
Pozo also pointed out that the debt “is not being increased, but replaced, explaining that the money will be used to stimulate productive activity via credit lines and finance key projects to reactivate the economy. It will not be used to pay debt in arrears or State budgetary obligations.