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Overview

CDB provides $30 million loan to Development Bank of Ethiopia for on-lending to SMEs (Linked to Record ID#59661)

Commitments (Constant USD, 2023)$31,385,951
Commitment Year•2015Country of Activity•EthiopiaDirect Recipient Country of Incorporation•EthiopiaSector•Banking And Financial ServicesFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Sep 4, 2015
First repayment (originally scheduled)
Nov 20, 2016
Last repayment (originally scheduled)
Jun 28, 2023

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 ownership

Funding agencies

State-owned Policy Banks

  • China Development Bank (CDB)

Receiving agencies

State-owned Banks

  • Development Bank of Ethiopia (DBE)

Implementing agencies

State-owned Banks

  • Development Bank of Ethiopia (DBE)

Loan description

CDB provides $30 million loan to Development Bank of Ethiopia for on-lending to SMEs

Grace period•2.25 yearsGrant element•25.1516%Interest rate (t₀)•3.1375%Interest type•Variable Interest RateLoan tenor•6-month rateMaturity•7.75 years

Narrative

Full Description

Project narrative

On September 4, 2015, China Development Bank signed a $30 million 'special loan facility' agreement with the Development Bank of Ethiopia to support small and medium sized enterprise (SME) development. The borrowing terms of the loan include: a 7.75-year maturity, a 2.25 year grace period, and an annual interest rate of 6-month LIBOR plus a 2.6% margin. The loan's first and last scheduled principal payment dates were December 28, 2017 and June 28, 2023, respectively. Its first and last scheduled interest payment dates were November 20, 2016 and June 20, 2023, respectively. The borrower was responsible for repaying the loan in semi-annual installments between 2016 and 2023.

Staff comments

1. The proceeds of this loan were mostly likely on-lend by the Development Bank of Ethiopia to SMEs. 2. AidData has estimated the loan's all-in interest rate (3.13717%) -- at the time that it was issued -- by adding 2.6% to average 6-month LIBOR in September 2015 (0.53717%). 3. This $30 million CDB loan to DBE was not included in the database of Chinese loan commitments that SAIS-CARI released in 2020 and re-released in 2021. Nor was it included in the China's Overseas Development Finance Database or Chinese Loans to Africa (CLA) Database maintained by Boston University's Global Development Policy Center (as of August 2024). 4. CDB issued a separate, $25 million loan to DBE in 2013 that is captured via Record ID#59661. 5. The loan identification number in the Government of Ethiopia’s Debt Management and Financial Analysis System (DMFAS) for the $30 million CDB loan is 20935000 and the corresponding project name in DMFAS is ‘SPECIAL FACILITY AGREMENT-SMEs’. See https://www.dropbox.com/scl/fi/7nrczfanixvivmiyzqx3i/MOFED-Loan-Level-Data-on-Borrowing-Terms-and-Loan-Performance-September-2024_OTHER_PUBLIC.xlsx?rlkey=5sqhh9ii4t3x8cmz0jf6s7cod&dl=0. 6. As of September 2024, the Government of Ethiopia recorded the loan's all-in interest rate as 8.25% in DMFAS. See https://www.dropbox.com/scl/fi/7nrczfanixvivmiyzqx3i/MOFED-Loan-Level-Data-on-Borrowing-Terms-and-Loan-Performance-September-2024_OTHER_PUBLIC.xlsx?rlkey=5sqhh9ii4t3x8cmz0jf6s7cod&dl=0.”