Narrative
Full Description
Project narrative
In 2012, China Development Bank (CDB) and Sonangol Finance Limited — a wholly owned subsidiary of Sociedade Nacional de Combustiveis de Angola (Sonangol), Angola's state-owned oil company — signed a $1 billion pre-export term facility (loan) agreement to support the company’s ‘development.' The loan had a maturity of 9 years (final maturity date: December 31, 2020), but its other borrowing terms are unknown. On December 31, 2017, Sonangol Finance Limited fully repaid this loan when it made an AOA 50,024,700,000 early loan repayment. Its December 31, 2017 repayment followed an earlier repayment in 2017 worth AOA 33,349,800,000. The loan was 'fully settled' on January 31, 2018.
Staff comments
1. CDB issued two separate $1 billion loans to Sonangol Finance Limited in 2012. One carried a 3-year maturity and the other carried a 10-year maturity (as captured via Record ID#47103). These separate loan commitments should not be confused. For more information, see pgs. 150 and 151 of Sonangol’s Management Report and Consolidated Accounts 2017 (https://www.dropbox.com/scl/fi/7jhwalmuyavwszvspq1x5/sonangol-annualreport-2017-eng.pdf?rlkey=w6n6njkitwzzczdg1k8coeshg&dl=0). 2. A pre-export finance (PXF) facility an arrangement in which a commodity (e.g. oil) producer gets up-front cash from a customer in return for a promise to repay the customer with that commodity (possibly at a discount) in the future. PXF funds may be advanced by a lender or syndicate of lenders to a commodity producer to assist the company in meeting either its working capital needs (for example, to cover the purchase of raw materials and costs associated with processing, storage and transport) or its capital investment needs (for example, investment in plant and machinery and other elements of infrastructure). PXF facilities are usually secured by (1) an assignment of rights by the producer under an ‘offtake contract’ (i.e., a sale and purchase contract between the producer and a buyer of that producer of goods or commodities), and (2) a collection account charge over a bank account into which proceeds due to the producer from the buyer of the goods or commodities under the offtake contract are credited. There are two key documents in prepayment finance transactions: a contract providing for the advance payment by the offtaker to the producer for the purchase of goods/commodities (the 'Prepayment Contract'), and a loan agreement between a lender and the offtaker (the 'Offtaker Loan Agreement') under which the advance payment is financed. 3. The loan is also known as a receivables purchase agreement facility. 4. The repayment figures are based on a 2017 average exchange rate of 1 USD: 166,742 AOA.