Narrative
Full Description
Project narrative
In 2013, Ethiopian Electric Power Corporation (EEPCo) signed a $88,510,000 loan agreement with the Export-Import Bank of China for the Gibe III Hydro Power Transmission and Transformation Substation Project. The estimated borrowing terms of the loan included an interest rate of 2.9872%, a grace period of 3.1666 years, and maturity of 13.7792 years. The purpose the project was to construct one or more substations to facilitate the evacuation of power from the Gibe III hydroelectric power plant. The project was completed and put into operation in 2014.
Staff comments
1. According to the World Bank's Debtor Reporting System (DRS), the weighted average grace period of all ‘private’ sector lending from all Chinese creditors to government and government-guaranteed borrowing institutions in Ethiopia was 3.1666 years in 2013. AidData estimates the grace period of the CET loan by using this figure. See https://www.dropbox.com/scl/fi/g794svts1vdwnvksjllsh/August-2024-IDS-Download-Ethiopia-s-Borrowings-and-Borrowing-Terms-from-Private-Sector-PRC-Creditors.xlsx?rlkey=i6j0mqp1jrx5en6xll3ebgl3g&dl=0. 2. According to the World Bank's Debtor Reporting System (DRS), the weighted average maturity of all ‘private’ sector lending from all Chinese creditors to government and government-guaranteed borrowing institutions in Ethiopia was 13.7792 years in 2013. AidData estimates the maturity of the CET loan by using this figure. See https://www.dropbox.com/scl/fi/g794svts1vdwnvksjllsh/August-2024-IDS-Download-Ethiopia-s-Borrowings-and-Borrowing-Terms-from-Private-Sector-PRC-Creditors.xlsx?rlkey=i6j0mqp1jrx5en6xll3ebgl3g&dl=0. 3. According to the World Bank's Debtor Reporting System (DRS), the weighted average interest rate of all ‘private’ sector lending from all Chinese creditors to government and government-guaranteed borrowing institutions in Ethiopia was 2.9872% in 2013. AidData estimates the interest rate of the CET loan by using this figure. See https://www.dropbox.com/scl/fi/g794svts1vdwnvksjllsh/August-2024-IDS-Download-Ethiopia-s-Borrowings-and-Borrowing-Terms-from-Private-Sector-PRC-Creditors.xlsx?rlkey=i6j0mqp1jrx5en6xll3ebgl3g&dl=0. 4. According to the World Bank's Debtor Reporting System (DRS), ‘private’ sector lending from all Chinese creditors to government and government-guaranteed borrowing institutions in Ethiopia was $1,802,970,000 in 2013. $1,802,970,000 is nearly identical to the sum of the face value of the $1,002,970,414 CET loan that supported the 500kV Power Transmission Line of the Great Ethiopian Renaissance Dam (GERD) Project, the $250 million ZTE supplier’s credit that supported the Telecom Transformation and Expansion 6 Circles Project (with support from a China Eximbank export seller’s credit), the $460.07 million ICBC loan that support the Gibe III Hydro Power Generating Set Project, and the $88.51 million loan (from China Eximbank and potentially other Chinese creditors) that supported the Gibe III Hydro Power Transmission and Transformation Substation Project. See https://www.dropbox.com/scl/fi/g794svts1vdwnvksjllsh/August-2024-IDS-Download-Ethiopia-s-Borrowings-and-Borrowing-Terms-from-Private-Sector-PRC-Creditors.xlsx?rlkey=i6j0mqp1jrx5en6xll3ebgl3g&dl=0 and https://www.sciedupress.com/journal/index.php/jms/article/viewFile/25488/16079. 5. This China Eximbank loan 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 it in the Chinese Loans to Africa (CLA) Database — that is maintained by Boston University's Global Development Policy Center — as of August 2024.