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Overview

ICBC provides a loan to Cargolux International Airlines for the operation of the 'Silk Road in the Air'

Commitment Year•2017Country of Activity•LuxembourgDirect Recipient Country of Incorporation•LuxembourgOverseas Jurisdiction•LuxembourgSector•Transport And StorageFlow Type•Loan

Status

Project lifecycle

Pipeline: Commitment

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Sep 1, 2017

Geospatial footprint

Map overview

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The project was a facility agreement with Cargolux Airlines International S.A., a Luxembourg-based international air cargo company headquartered at 70 Rue de Luxembourg, 5230 Sandweiler, Luxembourg. More detailed locational information can be found at: https://www.openstreetmap.org/relation/10521355

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Ultimate beneficial owners

At least 25% host country ownershipAt least 25% Chinese ownership

Funding agencies

State-owned Commercial Banks

  • Industrial and Commercial Bank of China (ICBC)

Receiving agencies

Joint Venture/Special Purpose Vehicles

  • Cargolux Airlines International S.A.

Loan desecription

ICBC provides a loan to Cargolux International Airlines for the operation of the 'Silk Road in the Air'

Interest type•Unknown

Narrative

Full Description

Project narrative

In September 2017, the Luxembourg Branch of the Industrial and Commercial Bank of China (ICBC) entered into a facility agreement with Cargolux Airlines International S.A. — a Luxembourg-incorporated and based all-cargo airline and air freighter jointly owned by HNCA (Luxembourg) S.à.r.l., a Luxembourg-incorporated subsidiary of Henan Civil Aviation Development Investment Co., Ltd. (HNCA), a Chinese state-owned aviation investment company under the Government of Henan Province (35.00% equity stake), Luxembourg state-owned airline Luxair S.A. (35.10% stake), Luxembourg state-owned bank Banque et Caisse d'Épargne de l'Etat (10.91% stake), Luxembourg state-owned bank Société Nationale de Crédit et d'Investissement (SNCI) (10.67% stake) and the State of Luxembourg (8.32% stake) — for the operation of the "Silk Road in the Air". The precise face value of the loan was confidential. The proceeds were to be used by the borrower to operate a 8,000-kilometer cargo air route, known as the "Silk Road in the Air", run by Cargolux between Luxembourg Airport and Zhengzhou Airport. On June 14, 2017, during the visit of Luxembourg Prime Minister Xavier Bettel to Beijing, Cargolux launched the route. As of March 2018, it was carrying an estimated 150,000 metric tons of cargo annually. The route was framed as part of the One Belt, One Road (OBOR) as Air Silk Road cooperation and an example of Cargolux's commitment to expanding operations in China, its partnership with HNCA, and its new Chinese joint venture Henan Cargo Airlines.

Staff comments

1. "Banking on success in Europe" states that ICBC had worked "over the years" with Cargolux on "smaller projects" prior to the loan for the Silk Road in the Air; it is unknown whether these represent loans. This issue merits further investigation. 2. In 2014, HNCA acquired a 35% stake in Cargolux for $120 million USD using a Bank of China (BOC) loan, as captured by Record ID#103263.