JOHANNESBURG (Reuters) – Zambia’s government said in a presentation to investors on Friday that it hoped to agree debt relief terms with official creditors by the end of the year or the beginning of 2023.

Zambia was the first African country to default in the era of COVID-19, when it struggled with debt that reached 133% of GDP at the end of 2021.

The presentation, made to holders of Zambia’s three Eurobonds, said a present value reduction of $6.3 billion, or 49% of the external debt being restructured, was needed by 2027, to meet the targets set by the International Monetary Fund last month.

World Bank chief David Malpass previously said a 45% debt reduction was “essential”, which some bondholders said was unacceptable.

The presentation said the southern African country was aiming to strike a restructuring deal “in principle” with a committee of bondholders in the first quarter of next year.

He also said he aimed to implement the Eurobond restructuring alongside bilateral and commercial debt restructuring in the first three months of 2023.

The government of Africa’s second-largest copper producer added that creditor preferences would be taken into account as much as possible in the restructuring.

The relief could range from “substantial” haircuts with a short maturity to “very long” maturity extensions with concessional interest rates and no reduction in the original loan value, he said.

According to the IMF, which holds its annual meetings with the World Bank in Washington next week, Zambia needs $8.4 billion in “cash debt relief” – both reducing interest payments and loan repayments – from 2022 to 2025.

Zambia’s external public debt reached $14.87 billion at the end of June 2022, the finance minister said last month.

The government said in March that external debt was $17.27 billion at the end of 2021, a third of which was held by Chinese lenders. In July, it canceled $2 billion in undisbursed loans.

In late August, the IMF approved a three-year, $1.3 billion loan to Zambia, a crucial step in the southern African country’s quest to restructure its debts.

(Reporting by Rachel Savage; Writing by Anait Miridzhanian; Editing by Alexander Winning, James Macharia Chege, William Maclean)