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Overview

CDB provides EUR 200 million loan to BANGE for SME on-lending purposes

Commitments (Constant USD, 2023)$232,502,725
Commitment Year•2019Country of Activity•Equatorial GuineaDirect Recipient Country of Incorporation•Equatorial GuineaSector•Banking And Financial ServicesFlow Type•Loan

Status

Project lifecycle

Implementation

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Jan 22, 2019
First repayment (originally scheduled)
Jan 21, 2022
Last repayment (originally scheduled)
Jan 19, 2029

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

Government Agencies

  • Government of Equatorial Guinea

State-owned Banks

  • Banco Nacional de Guinea Ecuatorial

Implementing agencies

State-owned Banks

  • Banco Nacional de Guinea Ecuatorial

Collateral providers

Government Agencies

  • Government of Equatorial Guinea

Loan description

CDB provides EUR 200 million loan to BANGE for SME on-lending purposes

Grace period•3 yearsGrant element•29.9791%Interest rate (t₀)•3.263%Interest type•Variable Interest RateLoan tenor•6-month rateMaturity•10 years

Collateral

A minimum cash balance of EUR 3.5 million in a debt service reserve account (DSRA). The EUR-denominated DSRA number is NRA42109780000021500000.

Narrative

Full Description

Project narrative

At the end of 2017, Banco Nacional de Guinea Ecuatorial (National Bank of Equatorial Guinea or BANGE) -- a bank that is majority-owned by the Government of Equatorial Guinea -- requested an EUR 400 million loan from China Development Bank (CDB). Then, on January 22, 2019, Equatorial Guinea's Ministry of Finance, Economy, and Planning and CDB signed an EUR 200 million term facility (interbank loan) agreement (ID#1942106089) to facilitate on-lending to small- and medium-sized enterprises (SMEs) in Equatorial Guinea. The loan carried a 10-year maturity, a 3-year grace period, an interest rate of 6-month EURIBOR plus a 3.5% margin, a 0.5% commitment fee, and a 1.5% (EUR 3 million) upfront (management) fee. The borrower was also expected to maintain a minimum cash balance of EUR 3.5 million in a debt service reserve account (DSRA). The proceeds of the loan were on-lent from the Ministry of Finance, Economy, and Planning to BANGE. The loan's (principal) amount outstanding was EUR 149,078,927 on March 16, 2020. The borrower was expected to make an interest payment worth EUR 2,083,827.16 on May 21, 2020.

Staff comments

1. CDB offered BANGE an EUR 400 million loan with a more favorable interest rate if it was willing to maintain a minimum balance of EUR 200 million in a cash collateral (escrow) account. However, BANGE reportedly declined this offer and opted for a smaller (EUR 200 million) loan with a higher interest rate. 2. As of November 2024, this loan from CDB was not captured in Boston University's Chinese Loans to Africa (CLA) database. 3. Some sources suggest that the loan carried a fixed interest rate of 4.8%. However, AidData has identified the loan's interest rate as 6-month EURIBOR plus a 3.5% margin based on official correspondence between CDB and the Government of Equatorial Guinea on March 16, 2020. See https://www.dropbox.com/scl/fi/170i0gv9cdm40ogicli4x/About-the-repayment-on-21-May.pdf?rlkey=c5opif88g87hwyczlhnx2z0sv&dl=0 4. The EUR-denominated DSRA number is NRA42109780000021500000. The USD-denominated deposit account number is NRA42108400034336310000. The EUR-denominated loan account number is NRA42109780000019940000.