China Stakes Its Claim in Latin American Energy:

advances made in the environment, labor and human rights in favor of more profitable business conditions for Chinese companies. 49 The presence of China in major projects also raises questions about accumulating excess debt, promoting corruption, governance and potential environmental damage.

development and obtain up to $2.8 billion for new projects.

A debt trap and hidden debt - A global financial quandary

Repayment terms for credits from the CDB and CHEXIM are not available to outsiders, and are essentially secrets shared by the Chinese lending banks and the LAC government agencies receiving the loans. Governments and SOEs in the region may be walking into a debt trap – adding unsustainable levels of new indebtedness to their already tenuous fiscal position. Since outsiders have no idea about repayments terms and related issues, it’s impossible to determine if debt is accumulating too rapidly, as in the case of Venezuela. In a dramatic move, Ecuador recently signed an agreement with the U.S. International Development Finance Corp. (DFC) that would reduce its debt to China, exclude Chinese telecom companies from participating in Ecuador’s 5G mobile network

Under the framework agreement, the DFC will work “with private-sector financial institutions to help create a special purchase vehicle that will buy oil and infrastructure assets in Ecuador,” the Financial Times (FT) said. 50 Proceeds of these sales will be used to pay Chinese debt ahead of schedule and provide up to $2.8 billion for new projects. Ecuador’s outstanding debt to China will be $3.5 billion after a scheduled payment is made, the newspaper said.

One of the stipulations of the accord requires Ecuador to sign the Trump administration’s “Clean Network”

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