Ecuador has reached an agreement to restructure its debt with Chinese banks, the government said in a statement on Monday, providing debt relief worth some $1.4 billion until 2025.

Ecuador's President Guillermo Lasso announced in February that he was looking to restructure the country's debt and improve the conditions of long-term oil sales contracts with Beijing.

China has become Ecuador's main financial partner in the past decade.

Agreements were reached with both the China Development Bank and the Export-Import Bank of China (Eximbank) for loans worth $1.4 billion and $1.8 billion respectively, extending the loans' maturity and reducing amortization.

"As a result of these agreements, the maturities are extended to 2027 for China Development Bank and 2032 for Eximbank, allowing the cash-flow relief to support government priorities," the president's press team said in the statement.

Ecuador also managed to reduce certain applicable interest rates and suspend all amortizations with China Eximbank for a six-month grace period, the government said.

The loans were agreed during the government of former President Rafael Correa, while several were linked to long-term oil sales contracts with Chinese companies.

The agreements also involve freeing up certain amounts of exports to Chinese oil company CNPC under oil-backed contracts, allowing Ecuador to sell an unspecified quantity of oil at market prices, the statement said.

State-owned energy company Petroecuador reached an agreement with Petrochina last week on a number of crude oil deliveries.

Since taking office last May, Lasso has turned to multilateral organizations for financing to reactivate Ecuador's economy, which was battered by the coronavirus pandemic, and renegotiated a $6.5 billion credit agreement with the International Monetary Fund, which ends this year.

The Wall Street Journal first reported on Monday that Lasso had announced a deal to with China to restructure $4.4 billion worth of debt.

(Reporting by Alexandra Valencia in Quito and Jahnavi Nidumolu in Bengaluru Writing by Oliver Griffin Editing by Lincoln Feast.)