Zambia has engaged lenders to facilitate the formal cancellation of over $2 billion in undisbursed loans as part of measures to address its debt challenges, the ministry of finance said on Friday.
The ministry said in a statement that it has taken measures to cancel some loan financed projects and to change the scope of a few critical projects.
The creditors of undisbursed loans, which are being cancelled, include Exim Bank of China, Jiangxi Bank, Intesa Sanpaolo bank and Israel Discount Bank, the statement said.
The ministry of finance also said that a number of continuing projects, which were initially financed through commercial loans, will now be financed through government revenues over the medium term.
In 2020, Zambia became the first African country in the COVID-19 pandemic era to default on its debts, struggling with external debts that reached over $17 billion at the end of last year, according to government data.