China Eximbank provides $84 million loan for Phase 1 (Obouya-Boundji-Okoyo Section) of Obouya-Gabon Border Road (RN3) Construction Project (Linked to Project ID#68956 and #60219)

On June 19, 2006, China Eximbank and the Republic of Congo signed a $1.6 billion loan framework agreement — also known in the Republic of Congo as the “strategic partnership” (“partenariat stratégique”) — that allowed the Republic of Congo to obtain China Eximbank loans for infrastructure projects through a securitization mechanism: Société Nationales des Pétroles Congolais (SNPC)—the country’s state-owned oil company — agreed to deposit a portion of the cash proceeds from its oil exports into an escrow account that is controlled by China Eximbank. This framework agreement (captured in Project ID#60219) was ratified on October 26, 2006. One of the subsidiary loans that was approved through the framework agreement included an $84 million loan in 2007 for Phase 1 (Obouya-Boundji-Okoyo Section) of the Obouya-Gabon Border Road (RN3) Construction Project. This loan carried the following borrowing terms: 0.25% interest rate, 20-year maturity, and a 5-year grace period. Its (principal) amount outstanding was unknown as of December 31, 2019. The Obouya-Gabon Border Road (RN3) Construction Project supported the development of a 207 km road corridor. The road connects National Route 2 (RN2) with the Gabon border, and its construction included small bridges, drainage infrastructure, schools, and medical centers for major villages along the road, and a gas station at 100km intervals. This project was implemented in two phases and supported by two different China Eximbank loans. Phase 1 (captured via Project ID#14829) supported the construction of 116.575 km segment of the border road from Obouya to Okoyo via Boundji. A formal project commencement ceremony took place on February 25, 2008. However, a project start order was not issued until June 15, 2008. The project achieved temporary acceptance on November 2, 2011. On the very next day (November 3, 2011), a project completion (inauguration) ceremony took place. However, the contractor responsible for implementation later reported that Phase 1 was not completed until October 23, 2013. Phase 2 (captured via Project ID#68956) involved the construction of a 90 km segment of the border road from Okoyo to the country’s border with Gabon via Lékéty. A foundation laying ceremony for Phase 2 took place on November 3, 2011 and this road segment opened to traffic on December 14, 2015. China Machinery Engineering Corporation (CMEC) was the contractor responsible for the implementation of both phases.

Additional details

1. Phase 1 is also known as the Obouya-Boundji-Okoyo (OBO) Road Project or the Obouya-Boundji-Okoyo (OBO) Section of the National Route 3 (RN3) Construction Project. The Chinese project title for Phase 1 is 刚奥布亚加蓬边境公路一期工程 or 欧布亚－布昂吉－欧克依欧公路项目 or 中机总公司3号路 or 奥约-布恩吉-奥科约（3号）公路. The Obouya-Gabon Border Road Project is also known as Obouya-Okoyo-Lékéty-Gabon Border Road Project. 2. In the database of Chinese loan commitments that SAIS-CARI released in July 2020, it identifies a $106 million China Eximbank loan for Phase 1 (Obouya-Boundji-Okoyo Section) of the Obouya-Gabon Border Road Construction Project. For the time being, AidData records the face value of the loan ($84 million) that the Congolese authorities disclosed to the World Bank and the World Bank reported in its September 2014 Republic of Congo Economic Update publication. However, there is evidence that the value of the commercial contract for Phase 1 increased by nearly 25% (to $125 million) due to implementation difficulties. Further investigation is needed to determine if the face value of China Eximbank loan that supported Phase 1 was amended to help finance the increase in the value of the commercial contract with CMEC.

Number of official sources

12

Number of total sources

17