China Eximbank provides $608 million USD loan for 1250 MW Merowe Hydroelectric Power Plant Project (Linked to projects #695, #56927, #56959)

In October 2002, a joint venture called CCMD Corporation, which is between China International Water and Electric Corporation (CWE) and China Water Resources and Hydropower Engineering Corporation (CWHEC or Sinohydro), applied to China Eximbank for a loan guarantee before bidding on the 1250 MW Merowe Hydroelectric Power Plant Project in Sudan (See: Sina News (source #117868)). On 20 May 2003, this Chinese consortium ended up winning three different contracts for this project: (1) $600 million USD (550 million EUR) contract signed 7 June 2003 for construction of the dam (See: ECCO source #67111)(2) $60 million USD contract signed 23 December 2003 for auxiliary projects related to the metal frame and hydraulic mechanics (See: ECCO source #64543)(3) $400 million USD contract signed 23 December 2003 for construction of substations and transmission lines (See: ECCO source #64543). The $381.5 million USD loan for this component is captured in the linked project #695. On 23 December 2003, China Eximbank signed three different loan agreements worth a total of $519 million USD in order to partially finance the first two contracts (See: Sudan Ministry of Finance (source #117844)): (1) USD $400 million loan (See also: World Bank source #11327)(2) USD $65 million loan(3) USD $54 million loanThese loans carried the following terms: a 20 year maturity and a grace period between 6 and 7 years (See: Sudan MOF source #117844). China Eximbank later increased its total lending for the 1250 MW Merowe Hydroelectric Power Plant Project to $608 million USD, which is the transaction amount recorded in this project (See: SAIS-CARI Policy Brief p. 7 source #64493; Chinese Loans to Africa Database; Sudan Ministry of Finance source #111236). It is unclear when China Eximbank committed the additional $89 million USD from its original commitment of $519 million USD. The joint venture between CWE and Sinohydro actually won four different contracts: 2A, 2B, 2C, and 3D worth a total of 603 million EUR (6 billion RMB) (See: Source #117869). Contracts 2A-C were probably signed in 2003 (described in first paragraph) and contract 3D (unknown) likely explains the increase in Chinese financing. The total project cost is unclear but estimates range from $1 billion to $3 billion USD. Therefore, several other entities served as co-financiers (See: Corner House source #44382, p. 3). The 1250 MW Merowe Hydroelectric Power Plant Project was co-financed with:(1) $250 million USD from Arab Fund for Social and Economic Development (possibly an additional $211 million USD)(2) $150 million from the Kuwait Development Fund (possibly an additional $50 million USD)(3) $150 million USD from the Abu Dhabi Foundation(4) $200 million USD from the Saudi Fund for Development(5) $15 million from the Government of Qatar(6) $106 million USD from the Government of Oman (7) $575 million USD from the Government of SudanThe 1250 MW Merowe Hydroelectric Power Plant Project involved the construction of a 9.7-kilometer-long and 65-meter-high dam with a total installed capacity of 1250 MW and a storage capacity at 12.4 billion cubic meters. It is near Merowe Town in northern Sudan, about 350 kilometers (220 mi) north of the capital Khartoum. The project owner is Sudan’s Ministry of Irrigation and Water Resources’ Merowe Dam Implementation Unit. The contractors responsible for implementation included China International Water and Electric Corporation (CWE), Sinohydro, Harbin Power Engineering Company (HPEC), and Alstom, a French company (See: SAIS-CARI Policy Brief). The originally anticipated project start and end dates were 30 July 2005 and 30 July 2008, respectively. The project formally commenced in July 2003, and the first two generators were officially connected to the national grid on March 3, 2009. However, it was not until April 8, 2010 that the tenth unit of the Merowe dam was officially connected to the grid.The project was awarded the Luban Prize, a grand master prize in the PRC for development projects. However, it was also plagued by controversy. An estimated 60,000 civilians were displaced during the construction of the dam. Sudanese civilians protested the project’s execution from the start, and in a confrontation with authorities in April 2006, five people from a displaced community were killed.In order to facilitate the resettlement of people displaced by the Merowe Dam, the Chinese Government provided another $37.7 million USD for the Kehaila East Agriculture Scheme, the El Makabra Agriculture Scheme (Merowe Resettlement) Project (recorded in project #56959), and $110.7 million USD for the New Amri Agriculture Scheme (Merowe Resettlement) Project (recorded in project #56927). China Eximbank also provided a $381,467,000 USD loan for the Merowe Hydroelectric Dam Transmission Lines and Substations Project (recorded in project #695).

Additional details

This project is also called Sudan's Three Gorges Project. The Chinese project title is 麦罗维电站工程 or 麦洛维大坝工程 or 苏丹的麦洛维水库大坝工程 or 苏丹麦洛维项目 or 麦罗维大坝 or 苏丹麦洛维大坝工程 or 蘇丹麥洛維水電站項目 or 阿特巴拉-海亚公路项目. SAIS-CARI's Chinese Loans to Africa Database claims that this is actually an export buyer's credit loan. AidData relies on the borrowing terms that are reported by the Government of Sudan.

Number of official sources

20

Number of unofficial sources

14