China CAMC Engineering Co, Ltd provides supplier's credit for Baoré Cement Factory Project (Linked to Record ID#397)

Project narrative

On September 14, 2006, the Government of Chad and China CAMC Engineering Co, Ltd signed a memorandum of understanding regarding the construction of a turnkey cement plant in Baoaré (Mayo Dallah Department). Then, in July 2007, China Eximbank and the Government of Chad signed an RMB 700 million ($92,029,990.50) government concessional loan (GCL) agreement for the Baoré Cement Factory Project (as captured via Record ID#397). This loan carried a 1.5% interest rate, a 5-year grace period, and a 13-year maturity. The proceeds of the GCL were on-lent to Société National de Ciment Tchad (SONACIM Tchad), a Chadian state-owned company that was established to manage the Baoré Cement Factory. The ultimate borrower (SONACIM Tchad) used the proceeds of the GCL to finance a $87,784,200 commercial contract with China CAMC Engineering Co, Ltd, which was signed on January 30, 2007. The Baoré Cement Factory Project involved the construction of a cement plant with an annual production capacity of 200,000 tons as well as a dedicated heavy fuel oil (HFO) power station, mining equipment and access roads. The plant occupies an area of 17 hectares and it is located in the village of Bissi Kéda within Mayo Kebbi West State (approximately 8km from the limestone quarries in Baoaré). To control the quality of the cement that is produced, a modern laboratory adjoins the factory; it is used to analyze samples taken at random to verify their compliance with international standards. Beijing Triumph Materials Engineering Design Co. was the contractor responsible for project design and China CAMC Engineering Co., Ltd. was the contractor responsible for implementation. The project commenced on December 17, 2007, and was originally scheduled to reach completion within 30 months (June 17, 2010). The factory was officially completed and put into production on February 16, 2012. Chad's President Idriss Deby, Prime Minister Emmanuel Nadingar, and Chinese Ambassador Yang Guangyu attended the opening ceremony for the factory. The region where the cement plant is located has three quarries with 7 million tonnes of limestone. It also abounds in clay, laterite and sand, three raw materials that go into the manufacture of cement. The cement plant reportedly employs 300 Chadian workers and 100 Chinese workers. In 2011, China CAMC Engineering Co, Ltd disclosed that the SONACIM Tchad (and the Government of Chad) owed it RMB 509,218,456.04 under a supplier’s credit agreement related to the Baoré Cement Factory Project (as captured via Record ID#105647). The borrowing terms of the loan are unknown. However, it appears that the proceeds of the loan were to be used by the borrower to build infrastructure that would supply electricity to the Baoré Cement Factory. China CAMC Engineering Co, Ltd disclosed that the borrower’s outstanding debts under the supplier’s credit agreement amounted to RMB 509,218,456.04 in 2011, RMB 334,149,551.23 in 2015, RMB 334,149,551.23 in 2016, RMB 105,984,996.89 in 2018, and RMB 105,984,996.89 in 2019. According to the Debt Directorate (MFBCP) within Chad's Ministry of Finance, SONACIM Tchad (and, by extension, the Government of Chad) were still in principal arrears and interest arrears to China CAMC Engineering Co, Ltd as of December 31, 2021.