Comparative “Debt-for-Resources / Infrastructure-for-Finance” Cases
Purpose of this episode
To understand what a “China-heavy” creditor profile can mean for a country under acute political and economic shock (as Venezuela is experiencing in January 2026), it is useful to compare three prominent precedents where Chinese state-backed finance featured heavily in sovereign (or quasi-sovereign) stress outcomes: Ecuador (oil-linked repayment and later reprofiling), Sri Lanka (strategic infrastructure and contested “debt-trap” narratives), and Zambia (multi-year restructuring under the G20 Common Framework).
1) Ecuador — Oil-linked loans, then “reprofiling” to regain fiscal space
What happened
Ecuador’s Chinese borrowing expanded substantially during the 2010s through structures that often linked oil supply contracts to repayment schedules. Facing liquidity constraints and a desire to “de-link” oil exports from debt rigidities, Ecuador pursued restructuring with Chinese lenders.
Key facts (what we can evidence)
- In September 2022, Ecuador announced it had reached an agreement to restructure debt with Chinese banks, generating relief estimated at about US$1.4bn through 2025. (Reuters, 2022). (Reuters)
- IMF documentation discusses the reprofiling of bilateral debt to China, noting that it reduced debt service over 2022–2024 by roughly US$400m per year on average (IMF, 2022). (elibrary.imf.org)
- Ecuador’s Ministry of Economy and Finance set out the mechanics: deferring near-term amortisations and smoothing oil-export profiles tied to oil-backed debt arrangements (Ministerio de Economía y Finanzas, Ecuador, 2022). (Ministerio de Economía)
- Regional analysts described the deal as restructuring around US$4.4bn with Chinese banks, consistent with the government’s headline relief claims (Inter-American Dialogue, 2022). (The Dialogue)
Why it matters for Venezuela
Ecuador illustrates a pragmatic pathway where a government can:
- Keep the debt “recognised” (avoiding an outright repudiation fight), while
- Reprofiling maturities and oil-delivery schedules to restore near-term fiscal and export flexibility.
This is especially relevant to any Venezuela scenario where oil flows are being politically contested and where creditors (including China) prioritise continuity of repayment in-kind or via oil revenues rather than legal debates alone.
2) Sri Lanka — Strategic infrastructure, contested “debt-trap” claims, and a formal bilateral debt workout
Sri Lanka is frequently cited in popular discourse as the emblematic “asset seizure” case. The reality is more technically nuanced, and that nuance is the lesson.
Hambantota Port (2017) — what the deal was (and what it was not)
- The Hambantota arrangement involved a 99-year lease and equity stake for China Merchants Port; widely reported figures include US$1.12bn paid to Sri Lanka under the deal (Al Jazeera, 2017; Reuters, 2018). (Al Jazeera)
- Crucially, analytical commentary emphasises that the inflow was largely used to bolster reserves / meet broader obligations rather than functioning as a simple “collateral seizure” directly triggered by a port-specific default (The Diplomat, 2020). (The Diplomat)
Interpretation for this series: Hambantota shows how strategic infrastructure can become a macro-financial bargaining chip in a broader balance-of-payments crisis—without necessarily being a straightforward “debt-for-asset swap” in the narrow sense.
Sri Lanka’s sovereign debt restructuring (2022–2024)
Sri Lanka’s 2022 default then led into a more orthodox debt process:
- In June 2024, Sri Lanka reached final debt treatment agreements with its Official Creditor Committee and separately restructured about US$4.2bn owed to China EXIM Bank (Sri Lanka Ministry of Finance, 2024; Reuters, 2024). (treasury.gov.lk)
- The Paris Club recorded the June 2024 milestone as enabling progress under the IMF-supported programme architecture (Paris Club, 2024). (clubdeparis.org)
Why it matters for Venezuela
Sri Lanka provides two different lessons:
- Infrastructure is political capital: ports/energy assets can become negotiating leverage even when not formally “collateral”.
- China can sign structured debt treatments when the process is anchored by a broader multilateral framework and incentives (notably IMF programme conditionality and coordinated creditor structures). (clubdeparis.org)
3) Zambia — The “long restructuring”: coordination with China, IMF anchoring, and comparability fights
Zambia is the clearest modern demonstration of how long sovereign workouts can take when creditor groups are fragmented and when “comparability of treatment” becomes a battleground.
What happened
- Zambia defaulted in 2020 and pursued restructuring via the G20 Common Framework, widely treated as a test case for integrating China (as a major creditor) into coordinated debt resolution.
- Zambia’s Ministry of Finance described the official creditor agreement as covering US$6.3bn and delivering an economic reduction close to 40% (Zambia Ministry of Finance, 2023). (mofnp.gov.zm)
- The IMF publicly welcomed the official creditor agreement under the Common Framework in June 2023 (IMF, 2023). (IMF)
- Progress remained iterative and slow, with disputes about whether private bondholder terms were “comparable” to official creditor relief (Reuters, 2023; Reuters, 2024). (Reuters)
- A detailed case study notes how, after the official creditor agreement, Zambia engaged private creditors to restructure roughly US$6.5bn of debt owed to bondholders and others (Grigorian et al., 2025). (Center For Global Development)
Why it matters for Venezuela
Zambia demonstrates a likely “shape” of negotiations when:
- China is a dominant or pivotal creditor,
- Private creditors (bonds, commercial banks) demand equal treatment, and
- External anchors (IMF programmes, creditor committees) are essential to prevent endless bilateral stalling.
For Venezuela, this suggests that any durable settlement will probably require credible macro-fiscal anchoring and a coordination platform that can manage China + private creditor comparability disputes—otherwise the process can become multi-year by default.
Cross-case synthesis — what these precedents jointly suggest
| Issue | Ecuador | Sri Lanka | Zambia | Implication for Venezuela (January 2026 context) |
|---|---|---|---|---|
| Resource-linked repayment | Central (oil-linked structures) (Ministerio de Economía) | Less central | Not resource-linked in the same way | Oil-revenue governance will be the core battlefield |
| Asset outcomes | Reprofiling, not asset transfer (elibrary.imf.org) | Port lease/equity; narratives contested (The Diplomat) | No major “asset handover” story | “Ownership vs lending” shifts may appear as China seeks stronger legal position |
| Multilateral anchoring | IMF context helps credibility | IMF programme + creditor committee enabled deals (clubdeparis.org) | IMF + Common Framework central (IMF) | If Venezuela lacks an accepted anchor/legitimacy platform, negotiations will drag |
| Time to resolution | Relatively quick reprofiling | Multi-stage | Multi-year | Expect sequencing: stabilisation first, restructuring second, normalisation last |
Practical takeaway: the “likely path” if Venezuela aims to avoid a decade-long freeze
Drawing from these precedents, a transition authority that wants stability without full repudiation typically pursues a sequence like:
- Debt and contract transparency (publish baseline obligations and oil-linked mechanisms)
- Short-term reprofiling for fiscal space (Ecuador-style) (elibrary.imf.org)
- Creditor coordination architecture (Sri Lanka/Zambia-style) (clubdeparis.org)
- Comparability management across China and private creditors (Zambia lesson) (Reuters)
- Asset protection policy (define what is strategic/non-transferable vs commercial)
This does not guarantee speed, but it reduces the probability of a prolonged “everything is frozen” equilibrium that blocks recovery.
References
- Al Jazeera (2017) Sri Lanka signs Hambantota port deal with China, 29 July. (Al Jazeera)
- Grigorian, D.A. et al. (2025) Zambia case study: sovereign debt restructuring under the G20 Common Framework. Center for Global Development. (Center For Global Development)
- IMF (2022) Ecuador: Sixth Review under the Extended Arrangement… IMF eLibrary. (elibrary.imf.org)
- IMF (2023) IMF Managing Director Welcomes Debt Treatment Agreement Reached by Zambia… 22 June. (IMF)
- Ministerio de Economía y Finanzas, Ecuador (2022) Ecuador has reached reprofiling agreements… (press note/PDF), 28 September. (Ministerio de Economía)
- Paris Club (2024) Agreement on a debt restructuring between the Official Creditors Committee and Sri Lanka, 26 June. (clubdeparis.org)
- Reuters (2018) Chinese firm pays $584 million in Sri Lanka port debt-to-equity deal, 20 June. (Reuters)
- Reuters (2022) Ecuador reaches deal with China to restructure debt, 20 September. (Reuters)
- Reuters (2023) Zambia dealt major setback as official creditors object…, 20 November. (Reuters)
- Reuters (2024) Sri Lanka signs debt deal with creditor nations…, 26 June. (Reuters)
- Reuters (2024) Zambia says secures more than 90% bondholder support…, 28 May. (Reuters)
- Sri Lanka Ministry of Finance (2024) Sri Lanka reaches final debt treatment agreements… 26 June. (treasury.gov.lk)
- The Diplomat (2020) The Hambantota Port Deal: Myths and Realities, 1 January. (The Diplomat)
- Zambia Ministry of Finance (2023) Question and Answer on: Zambia reaches… 6 July. (mofnp.gov.zm)