China Eximbank provides RMB 1.38 billion government concessional loan for Phase 2 of East Coast Demerara Road Project (Linked to Record ID#70805)

Project narrative

On December 30, 2022, Senior Finance Minister of Guyana, Dr. Ashni Singh, and Guo Haiyan, Ambassador of the People’s Republic of China to Guyana, signed a preferential loan framework agreement for Phase 2 of the East Coast Demerara Road Project. Then, on March 8, 2023, the Export-Import Bank of China signed an RMB 1,384,580,867.13 government concessional loan (GCL) agreement [CHINA EXIMBANK GCL NO. (2023) 1 TOTAL NO. (769)] with Government of Guyana’s Ministry of Finance for Phase 2 of the East Coast Demerara Road Project. The loan carried the following borrowing terms: a 20-year maturity, a 5-year grace period, a 2% interest rate, a 0.25% (RMB 3,461,452.17) management fee, a 0.25% commitment fee, and no default (penalty) interest rate. It was scheduled for repayment in 31 semi-annual repayments. The borrower was expected to use the proceeds of the loan to fully finance an RMB 1,384,580,867.13 commercial contract [ID#ECD2-C/B] between the Government of Guyana’s Ministry of Public Works and the China Railway First Group Company, which was signed on September 30, 2022. Phase 2 of the East Coast Demerara Road Project involves the extension of the Railway Embankment Road into four lanes from Sheriff Street to Orange Nassau, extension of the main East Coast Roadway from Orange Nassau to Mahaica as well as rehabilitation of the existing East Coast Demerara road from Belfield to Orange Nassau which will allow for additional lanes. It also involves the construction of 48 bridges and 22 culverts and another bridge across the Hope Canal. Upon completion, it is expected to ease traffic congestion, reduce commuting times, increase economic activity, and promote industrialization and job creation along the East Coast corridor. China Railway First Group Company is the EPC contractor responsible for implementation. As of June 2023, construction had begun on the road, with contractors executing drainage construction works along the railway embankment between Mon Repos and Annandale. Additionally, on the Belfield to Unity section, the contractor was preparing the right side for the widening of the road. These works included clearing and widening the area and backfilling with loam material to commence the construction of the widened road pavement. It is estimated to take 28 months to complete. The government's originally expected to complete the project within 28 months (estimated project completion date: December 31, 2024). A revised project completion date is October 31, 2025, according to a January 2025 update from the Ministry of Public Works.