Zambia's Spiraling Debt Offers Glimpse Into the Future of Chinese Loan Financing In Africa

Zambia is already restructuring, renegotiating or refinancing its extensive Chinese project finance debt, and Chinese companies are playing hardball, according to new research, CNBC reported. Southern Africa's third-largest economy is under pressure from an impending breakdown of its power supply and its inability to pay for electricity imports, and is staring down the barrel of further defaults on construction project financing and bond payments. State power utility Zesco revealed last month that a supply shortfall reached 810 megawatts in November, with Zambia and neighboring Zimbabwe both suffering 20-hour per day power cuts due to extreme drought conditions blighting its hydropower output. Given its spiraling debt profile, Zambia has been unable to tap into its foreign reserves to import power from the likes of South Africa and Mozambique. Read more