China Eximbank provides $24 million buyer’s credit loan for Dali and Mazmoom Water Supply Project (Linked to Umbrella #57039)

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 (see Umbrella 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 on November 4, 2009 was a $20.4 million BCL for the Dali and Mazmoom Water Supply Project. The proceeds from this BCL were used to finance 85% of the $24 million4 commercial contract signed on November 4, 2009 with China CAMC Engineering Co., Ltd. The project involved the construction of 140 km of water transmission pipelines, and the comprehensive survey, design, equipment supply, site installation, civil construction, acceptance and commissioning of a water treatment plant in the hamlet of Dali (دل) within Central Darfur State and a water treatment plant in the city of Mazmoom (or Al Mazmun or المزموم) within Sennar State. These plants have a daily water treatment capacity of 20,000 m3 and 7,000 m3, respectively. On July 1, 2009, the Mazmoom Water Supply Sub-Project was completed. The Dali Water Supply Sub-project was officially completed on June 19, 2012. There are some indications that the China Eximbank loan issued for the Dali and Mazmoom Water Supply 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. This project is also known as the Daly and Mazmoum Water Supply Project. The Chinese project title is 苏丹达利和马兹穆供水项目 and 苏丹达利和马兹穆供水项目. 2. None of these sources explicitly say that this BCL is worth $20.4 million. In fact, SAIS-CARI's Chinese Loans to Africa Database records this BCL's face value as $24 million. However, the Chinese Embassy in Sudan (source ID 12870) reported that $24 million is actually the value of the commercial contract with CAMC -- not the face value of the loan. China Eximbank's BCLs typically cover 85% of the total cost of a commercial contract, so for the time being AidData codes $20.4 million ($24 million*0.85) as the transaction (financial commitment) amount. 3. Some of the other subsidiary loans derived from the master loan facility captured in Umbrella Project ID#57093 covered 90% of the costs of their respective commercial contract, but there is no evidence that this was the case for Project ID#1052.

Number of official sources

9

Number of total sources

12