CMEC provides $551.5 million supplier's credit for Power Transmission Network Associated with the Imboulou Hydropower Plant Project (Linked to Project ID#434, #73614)

On December 19, 2005, CMEC and the Government of the Republic of Congo signed a supplier’s credit agreement worth $551,507,000 (or approximately worth CFA 321.7 billion) for the Power Transmission Network Associated with the Imboulou Hydropower Plant Project. It carried the following terms: a 17-year maturity, 5-year grace period, a 0.2% interest rate, and a 0.25% default (penalty) interest rate. The borrower was originally expected to make 24 semi-annual repayments between 2011 and 2022. The proceeds of the supplier’s credit were to be used by the borrower to finance 85% of the cost of its $648,832,000 commercial contract with CMEC. The Republic of Congo agreed to cover the remaining 15% of the commercial contract cost ($97,325,000) itself. Over the lifetime of the supplier’s credit, the Republic of Congo agreed to repay $557,849,330.50 in principal and interest. Then, on January 18, 2006, the supplier’s credit agreement was modified (in particular, Articles 6, 8 and 13). The project execution period was reduced from 5 years to 3.5 years and additional changes were introduced related to the name of the lender; the credit conditions; loan repayment and amortization table; the duration, validity and termination of the credit; and the conditions of entry into force of the credit. Then, on April 13, 2018, CMEC and the Republic of Congo signed another supplier’s credit agreement modification to reschedule the repayment terms. The parties agreed that the outstanding balance of the loan ($348,614,050) would be repaid according to the following repayment terms: 22-year maturity, a 0.2% interest rate, and 14 semi-annual installments between June 2021 and December 2027. As such, the rescheduling agreement effectively increased the grace period of the supplier’s credit by an additional 3 years (from June 2018 to June 2021). As of April 13, 2018, the borrower had already repaid $207,876,503.54. The loan's (principal) amount outstanding was $348,614,050 as of June 1, 2018. Under the terms of the rescheduling agreement, the borrower was responsible for making a $25,249,617 repayment (24,901,003 in principal and $348,614 in interest) on June 1, 2021 and a $25,224,716 repayment ($24,901,003 in principal and $323,713 in interest)on December 1, 2021. However, according to the Republic of Congo's Ministry of Finance, neither of these repayments were made. By the end of calendar year 2021, the Republic of Congo had approximately $50 million of principal and interest arrears to CMEC. This project sought to build upon the CMEC-financed 120MW Imboulou Hydropower Plant Project (captured in Project ID#434). It involved connecting the Imboulou Hydropower Plant with several small power stations to construct a “major power channel” (or “energy boulevard”) between the cities of Pointe-Noire, Brazzaville and Ouesso. More specifically, it supported the construction of a load dispatching center (“redistribution center”); the construction and rehabilitation of 220kv transmission lines and very high voltage transformer plants between Brazzaville and Pointe-Noire (passing through Mindouli and Loudima); the construction of seven 220 KV and 110 KV high-voltage power stations in Djiri, Ngo, Gamboma, Oyo, Boundji, Owando and Djambala (including a 220kV Imboulou-Ngo segment, a 220kV Ngo-Brazzaville segment; a 220kV Ngo-Gamboma segment, a 220kV Oyo-Owando segment, and a 110kV Ngo-Djambala-Oyo-Boundji segment); the construction of underground 220kV transmission line in Tsiélampo; the construction of nine 30kV aerial lines measuring 242 km in length (including an Imboulou-Inoni-Mpoumako-Imvouba segment, an Inoni-Inoni2-Mbouambé-Léfini segment, an Imboulou-Mbé-Ngabé segment, and an Imboulou-Mpouya segment); the construction of four 20kV underground transmission lines of 20kV to evacuate power from the Imboulou Hydroelectric Power Plant to the capital city of Brazzaville; and the construction of nine additional 220 kV and 110 kV high voltage lines (measuring 841 km in length). In total, the project sought to create a 1,588 km national electricity transmission network. CMEC was the contractor responsible for implementation. A project start order was issued on June 25, 2008. However, construction did not begin until May 28, 2009. The originally anticipated project completion date was December 31, 2011. But the project was ultimately completed on May 23, 2012. Project ID#1049 captures the original 2005 supplier’s credit and Project ID#73614 captures the 2018 debt rescheduling agreement.

Additional details

1. This project is also known as the Transmission Line Substations for Imboulou Hydropower Plant Project or the Pointe-Noire-Brazzaville Very High-Voltage Transmission Network Rehabilitation Project. The Chinese project title is 英布鲁水电站配套输变电工程 or 刚果(布)输变电工程 工程规 or 的刚果（布）英布鲁水电站配套输变 or 刚果输变电项目. The French project title is Projet de Construction du Réseau de Transport d’Energie Associé à la Centrale d’imboulou or Construction du réseau de transport d'énergie électrique associé à la centrale hydroélectrique d'Imboulou or Les lignes attenantes à la centrale hydroélectrique d’Imboulou. 2. In the database of Chinese loan commitments that SAIS-CARI released in July 2020, it identifies a $264 million China Eximbank loan in 2009 for this project. However, AidData relies on the face value of the CMEC supplier’s credit ($551,507,000) and the commitment year (2005) of the supplier’s credit agreement that is specified in the agreement itself. It is possible that CMEC obtained an export seller’s credit from China Eximbank to finance its supplier’s credit with the Republic of Congo; however, AidData has not yet independently confirmed that this occurred. 3. CMEC used to stand for China National Machinery & Equipment Import & Export Corporation, but it now refers to China Machinery Engineering Corporation. 4. The CMEC supplier's credit agreement can be accessed in its entirety via https://www.dropbox.com/s/g4bkuq71ezrpjoy/L%20n%C2%B019-2019%20du%2024%20mai%202019.pdf?dl=0 or https://www.documentcloud.org/documents/20488096-cog_2005_490. 5. A detailed analysis of the debt rescheduling that took place on April 13, 2018 can be found at https://www.cgdev.org/sites/default/files/bargaining-beijing-tale-two-borrowers-revised-feb2021.pdf and https://www.cgdev.org/sites/default/files/gardner-et-al-bargaining-with-beijing-data-revised.xlsx.

Number of official sources

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