China Eximbank provides $206.4 million buyer’s credit loan for 194.1MW Kamchay Hydroelectric Power Plant Project (Linked to Record ID#65326)

Project narrative

On August 31, 2007, China Eximbank and Sinohydro Kamchay Hydroelectric Project Co., Ltd. — a special purpose vehicle (SPV) and a wholly-owned subsidiary of PowerChina Resources Ltd. (PCR) — signed a $206,432,000 buyer’s credit loan agreement for the 194.1MW Kamchay Hydroelectric Power Plant Project. The loan carries a 15-year maturity, a 4-year maturity, and an annual interest rate of 12-month LIBOR plus a 1% margin. It was backed by a Sinosure insurance policy and secured by (i.e. collateralized against) with account pledge agreement, an insurance policy pledge agreement, and a land and building mortgage agreement, among other things. The proceeds of the loan were used to partially finance a commercial (EPC) contract PowerChina's subsidiary, Sinohydro Group, signed with the Cambodian Ministry of Industry, Mines and Energy, and Electricite du Cambodge on February 23, 2006. The total cost of this 44-year Build-Operate-Transfer (BOT) project was $280,500,000. 72% of the project cost was covered through China Eximbank debt financing (captured in this project) and 28% of the project cost was covered through equity (captured in Record ID#65326). The purpose of the project was to construct a 194.1MW hydroelectric power plant (with eight power generation units) in Bokor National Park (BNP), which is an extension of the Cardamom Mountains in the Elephant Mountain Range in southwestern Cambodia on the Kamchay River. The nearest city to the project site is the provincial town of Kampot, which is about 15km downstream of the river and 150km from Phnom Penh. Upon completion, the plant was expected to have a total installed capacity of 193,200 kilowatts. The electricity generated by the plant was to be connected through the Kampot Switching Station to the Phnom Penh Grid. Sinohydro Kamchay Hydroelectric Project Co., Ltd. served as the Project Owner, the Project Contractor, the Project Operator. A formal groundbreaking ceremony took place on April 8, 2006. It was attended by Chinese Prime Minister Wen Jiabao and the Prime Minister of Cambodia Hu Sen. However, construction did not begin until September 18, 2007. All 8 power generation units were put into operation on December 7, 2011. Then, on August 1, 2012, commercial power generation metering commenced. During project implementation, 2,015 hectares of protected forest were lost due to the flooding for the reservoir, and a total area of 2,291 hectares was destroyed. As the dam was located in a national park, no resettlement was required because there were no villages located upstream of the dam. However, the flooded area was a mixed bamboo forest, which provided raw materials for basket-making, rattan, and wild fruits, which contributed to the livelihoods of the poorer families located downstream. Under terms of the BOT agreement, Sinohydro sells the electricity generated by the Kamchay Hydroelectric Power Plant to the Electricite du Cambodge. The concession period is 44 years (4 years for construction and 40 years for operation). After the expiration of the concession operation period, the project facilities will be transferred to the Cambodian Government free of charge.