China Eximbank provides RMB 73.5 million governmental concessional loan for Textile Factory Project (Linked to Record ID#73357, #73365, and #73366)

Project narrative

On June 18, 1998, the Chinese Government and the Government of Benin signed an RMB 150 million preferential loan framework agreement for the Textile Factory Project. Under the terms of this agreement, a Chinese state-owned company, China Textile Industry Foreign Economic and Technical Cooperation Company (CTEXIC), and a Beninese state-owned company, Société des Industries Textiles du Bénin (SITEX), agreed to create a joint venture called Compagnie Béninoise de Textile (CBT). Rather than issuing a single RMB 150 million loan to CBT, the Export-Import Bank of China issued one loan to the Government of Benin (on behalf of SITEX) and another loan to CTEXIC. The face values of these loans, which sum to RMB 150 million, were issued in proportion to the SITEX ownership stake (49%) and CTEXIC ownership stake (51%) in CBT. On January 13, 2000, China Eximbank and La Caisse Autonome d'Amortissement du Bénin (a public sector institution supervised by Benin’s Ministry of the Economy and Finance) signed an RMB 73.5 million government concessional loan (GCL) agreement [China Eximbank GCL NO. (2000) 1 (57)] for the Textile Factory Project. This loan carried the following borrowing terms: a 15-year maturity, a 5-year grace period, an interest rate of 3%, a default (penalty) interest rate, a 0.3% commitment fee, and a 0.25% management fee. The borrower agreed to deposit project-related revenues in a special account to facilitate repayment. Record ID#18 captures the loan that was issued to La Caisse Autonome d'Amortissement du Bénin. In March 2000, China Eximbank and CTEXIC signed an RMB 76.5 million loan agreement for the Textile Factory Project. The borrowing terms of this loan are unknown. Record ID#73357 captures the loan that was issued to CTEXIC. The company was formally registered and established in Cotonou in February 2000. This project supported the construction, operation and management of a textile factory in the city of Lokassa called Compagnie Béninoise de Textile (CBT). The main factory building was designed with 24,000 cotton spindles and 768 weaving looms. It was built to achieve a production capacity of 13.7 million meters of unbleached cotton fabric and 923 tons of pure cotton yarn. The factory was put into production on October 31, 2002. CBT subsequently encountered financial problems and China Eximbank had to reschedule its loans with La Caisse Autonome d'Amortissement du Bénin and CTEXIC. China Eximbank reportedly rescheduled its loan to La Caisse Autonome d'Amortissement du Bénin in 2004 and its loan to CTEXIC on August 23, 2011 The terms of the 2004 rescheduling are unknown; however, it is known that the 2011 rescheduling resulted in a reduction of the loan’s interest rate to 1%. The 2004 loan restructuring is captured via Record ID#73365, and the 2011 restructuring is captured via Record ID#73366. As of 2018, SITEX had gone bankrupt and was looking to restructure, but the CBT factory was in production with 1200 employees (5 of whom were Chinese and 1,195 of whom were Beninese).