China Eximbank contributes to RMB 429 million syndicated term loan for 120.85 km Road from Darkhan-Selenge Highway to Shaamar-Zuunburen-Tsagaanuur-Tushig-Zelteri Port Project (Linked to Record ID#102883)

Project narrative

On July 19, 2016, the Government of Mongolia and Mongolia LZ Road Bridge (Монгол ЛЗ зам гүүр) — a special purpose vehicle and wholly-owned subsidiary of Longjian Road & Bridge Co., Ltd. (龙建股份) — signed an RMB 662.4 million concession agreement for the 120.85 km Road from Darkhan-Selenge Highway to Shaamar-Zuunburen-Tsagaanuur-Tushig-Zelteri Port Project. An addendum to the concession agreement was signed by the parties on March 30, 2017 to reflect the financing arrangement for the project, which was financed according to a 65:35 debt-to-equity ratio. To support the implementation of the project, Mongolia LZ Road Bridge signed an RMB 429 million syndicated term loan agreement with China Eximbank and Bank of China. The loan carried the following borrowing terms: a 7-year maturity, a 3-year grace period, an annual interest rate of 1-year SHIBOR plus a 1.1% margin. It was scheduled for repayment in four annual installments between 2020 and 2023: one installment on March 30, 2020, one installment on March 30, 2021, one installment on March 30, 2022, and one installment on March 30, 2023. The purpose of the project was to construct a 120.85 km paved road that runs from Darkhan-Selenge Highway to Shaamar-Zuunburen-Tsagaanuur-Tushig-Zelteri Port. It was envisaged that, upon completion, the road would serve as the main route for transporting agricultural products. Longjian Road & Bridge Co., Ltd. (龙建股份) was the contractor responsible for implementation. The project was originally scheduled for completion no later than October 31, 2021. However, Longjian Road & Bridge Co., Ltd. encountered delays due to Covid-19 pandemic restrictions. The project was ultimately completed on or around September 30, 2023.