China Eximbank provides $110 million buyer’s credit loan for 211 km El Nahood-Um Kadada Road Construction Project (Linked to Project ID#57039, #54079)

On July 29, 2008, China Eximbank and the Government of Sudan signed a $3 billion USD oil-backed master framework agreement (or line of credit) to finance various infrastructure projects (as captured via Project ID#57039). This resources-credit cooperation package is backed by future revenues from the sale of oil exports. Each subsidiary buyer’s credit loan (BCL) issued through the framework agreement carries a 15-year maturity and 5.6% interest rate. One of the subsidiary loans approved through this agreement in 2009 was a $110 million BCL for the 221 km El Nahood-Um Kadada Road Construction Project. The proceeds from this BCL were used to partially finance a $120 million commercial contract signed December 2008 with China Chongqing International Construction Corporation, which was signed in December 2008. The project involved the construction of a 221 km road that connects West Kordofan State with Northern Darfur State. The road begins in El Nahood (or En Nahud or نهد) — a city within West Kordofan State — and terminates in the city of Um Kaddada (أم كدّد;أمّ كدّادة) within Northern Darfur State. Construction commenced in March 2010. This project was plagued by various problems and delays. Local subcontractors were reluctant to conduct on-site work for safety reasons. The project was officially handed over to the Sudanese authorities at the end of the defect liability period on May 16, 2016. The completion of this project has reportedly promoted the development of animal husbandry along the road and shortened travel times in the area. There are some indications that the China Eximbank loan issued for the El Nahood-Um Kadada Road Construction Project may have underperformed vis-a-vis lender expectations. According to Sudan’s Finance Minister Ali Mahmood Abdel-Rasool, China Eximbank suspended its financing for 11 projects in Sudan following the secession of South Sudan in July 2011, which triggered a major loss of oil revenue (a key source of collateral for China Eximbank loans). Ali Mahmood Abdel-Rasool said at the time that the Government of Sudan had previously pledged oil revenues (worth 120,000 barrels per day) to China Eximbank as a source of collateral. Then, on February 18, 2012, the Chinese Government announced that it had agreed to reschedule the outstanding debt obligations of the Government of Sudan by extending loan repayment periods by 5 years (as captured via Project ID#30421). According to the External Debt Unit of the Central Bank of Sudan, the Government of Sudan's total arrears to Chinese creditors amounted to $3.864 billion ($2.608 billion in principal, $1.129 billion in interest, and $127 million in penalty interest) as of March 31, 2022.

Additional details

1. The project is also known as the 221 km El Nahood-Aum Kadada Road Construction Project and the El Nahud-Um Kadada Road Construction Project. The Chinese project title is 卢胡德-乌木卡达达道路项目. 2. The 211 km El Nahood-Um Kadada Road is part of a larger, $650 million Western Salvation Highway, which links Khartoum to Western states in Darfur (as captured via Project ID#54079). The financing arrangements for the other roads that make up the Western Salvation Highway are captured via Project ID#1013, ID#1051, ID#1053, and ID#1059.

Number of official sources

6

Number of total sources

13