Project ID: 85

China Eximbank provides $70 million government concessional loan for 160MW Grand Poubara Hydroelectric Dam Construction Project (Linked to Project ID#73173)

Commitment amount

$ 106721014.53643355

Adjusted commitment amount

$ 106721014.54

Constant 2021 USD

Summary

Funding agency [Type]

Export-Import Bank of China (China Eximbank) [State-owned Policy Bank]

Recipient

Gabon

Sector

Energy (Code: 230)

Flow type

Loan

Level of public liability

Central government debt

Financial distress

Yes

Infrastructure

Yes

Category

Intent

Development (The next section lists the possible statuses.)

Commercial

Development

Representational

Mixed

Financial Flow Classification

ODA-like (The next section lists the possible statuses.)

Official Development Assistance

Other Official Flows

Vague (Official Finance)

Flows categorized based on OECD-DAC guidelines

Project lifecycle

Status

Completion (The next section lists the possible statuses.)

Pledge

Commitment

Implementation

Completion

Suspended

Cancelled

Milestones

Commitment

2008-05-24

Actual start

2008-11-15

Planned complete

2013-05-15

Actual complete

2014-08-09

NOTE: Red circles denote delays between planned and actual dates

Geography

Description

On May 24, 2008, China Eximbank and the Government of Gabon signed an RMB-denominated government concessional loan (GCL) agreement worth $70 million for the 160MW Grand Poubara Hydroelectric Dam Construction Project. The agreement was signed by Gabonese Finance Minister Paul Toungui and China's ambassador Hxue Jinwei. The GCL carried the following borrowing terms: a 20 year maturity, a 7 year grace period, and a 3% interest rate. Also, on May 24, 2008, China Eximbank and the Government of Gabon also signed a USD-denominated preferential buyer’s credit (PBC) agreement worth $300 million for the 160MW Grand Poubara Hydroelectric Dam Construction Project. The borrowing terms of the PBC are unknown. The proceeds from the GCL and the PBC were used to finance approximately $370 million of a $398 million Engineering, Procurement, and Construction (EPC) contract with Sinohydro. The Government of Gabon covered the remaining $28 million cost of the EPC contract. The Government of Gabon also issued sovereign guarantees for the two loans from China Eximbank. Project ID#85 captures the GCL, while Project ID#73173 captures the PBC. The project involved the construction of a dam on the Ogooué river with 4 Francis turbines capable of generating 160 MW. The dam was built in part to generate power for an iron ore mine in Belinga (see Project ID#630). The project also involved the construction of two power transmission lines: a 15 km line from the dam site to Franceville, the country's third largest city, and another line from the dam site to Moanda (the largest manganese mining region in Gabon and in the world). The dam is located 15 km outside of Franceville in the province of Haut-Ogooué, more than 700 km southwest of Libreville, an area where the Compagnie minière de l’Ogooué’s (COMILOG) main manganese mine is located. Sinohydro was the contractor responsible for implementation. Construction officially began on November 15, 2008, and it was originally anticipated that the construction process will be completed in 54 months (May 15, 2013). The dam was impounded on April 30, 2013. Then, the four power generating units went into operation on August 5, 2013. The dam, water diversion system and other civil works passed final inspection by the project owner on July 22, 2014. The power generator set and auxiliary equipment also passed final inspection by the project owner on August 9, 2014, effectively marking the completion of the project. There are some indications that the China Eximbank loans for the 160MW Grand Poubara Hydroelectric Dam Construction Project may have financially underperformed vis-a-vis the original expectations of the lender. In mid-2014, a decline in international oil prices generated sharp reductions in Gabon’s oil exports and fiscal revenues. The country’s rising fiscal deficit led to the accumulation of arrears to external creditors. By 2017, the stock of the Government of Gabon’s external arrears stood at $115 million, including arrears to China, Canada, Germany, Spain, France, Israel, and South Korea. All of these arrears were successfully cleared by 2020. However, the Government of Gabon accumulated $3 million of additional arrears to Chinese creditors in 2020. By the end of May 2021, ‘the stock of [the Government of] Gabon’s external arrears stood at CFAF 98.03 billion (US$182.1 million), including CFAF 23.8 billion (US$44.2 million) vis-à-vis multilaterals and CFAF 21.05 billion (US$39.1 million) vis-à-vis government agencies and private creditors insured with companies from Paris Club member countries and from China [ICBC and China Construction Bank] CFAF 1.3 billion (US$2.42 million). The Government's strategy for the clearance of existing external arrears consists of focusing primarily on multilateral debt, bilateral debt, insured commercial commitments and seeking agreements with other creditors prior to the IMF Board meeting. Accordingly, we will clear the arrears vis-à-vis the multilaterals. We will also clear bilateral and commercial-insured arrears as follows: (i) Austria CFAF 6.83 billion (US$12.69 million); (ii) France CFAF 11.9 billion (US$22.11 million); (iii) Israel CFAF 2.23 billion (US$4.13 million); and Spain CFAF 0.09 billion (US$0.17 million). Regarding the other commercial arrears vis-à-cis AFREXIMBANK (CFAF 7.52 billion or US$13.97 million, and commercial non-insured vis-à-vis France CFAF 0.7 billion (US$1.24 million), Austria CFAF 8.71 billion (US$16.18 million), and Morocco CFAF 1.01 billion (US$1.87 million), we contacted these creditors individually to obtain from them the non-objection agreement. The same communication was made with China to which our bilateral payment arrears are about CFAF 34.01 billion (US$63.17 million).’ Then, in 2022, the IMF reported that the Government of Gabon’s external arrears to Chinese creditors stood at $23.9 million as of December 2021 and $1 million in June 2022.

Additional details

1. The Chinese project title is 大布巴水哈电站 or 承建的加蓬大布巴哈水电工程项目. The French project title is Projet Barage Grand Poubara. 2. In the database of Chinese loan commitments that SAIS-CARI released in July 2020, it identifies a single concessional loan for this project worth $318 million. However, the Government of Gabon and Sinohydro both report that China Eximbank supported this project with a $70 million government concessional loan (GCL) and a $300 million preferential buyer’s credit (PBC). Therefore, AidData records both of these loans. .

Number of official sources

9

Number of total sources

20

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Details

Cofinanced

No

Direct receiving agencies [Type]

Government of Gabon [Government Agency]

Implementing agencies [Type]

SinoHydro [State-owned Company]

Guarantee provider [Type]

Government of Gabon [Government Agency]

Loan Details

Maturity

20 years

Interest rate

3.0%

Grace period

7 years

Grant element (OECD Grant-Equiv)

26.2466%

Bilateral loan

Government Concessional Loan

Investment project loan