Project ID: 2034

China Development Bank provides $1.5 billion master lending facility (Tranche A) for oil, gas, agriculture, and infrastructure projects (linked to #28056, #58586, #30578, #60039, #73140, #85282)

Commitment amount

$ 1602013992.0

Constant 2017 USD

Not recommended for aggregates

This project is not recommended for use in creating aggregated sums. See the documentation for more information about this criteria.

Umbrella project

This project is classified as an "umbrella" project, and is connected to related projects.

Summary

Funding agency [Type]

China Development Bank (CDB) [State-owned Policy Bank]

Recipient

Ghana

Sector

Other multisector (Code: 430)

Flow type

Loan

Concessional

Yes

Category

Intent

Development (The next section lists the possible statuses.)

Commercial

Development

Representational

Mixed

Financial Flow Classification

ODA-like (The next section lists the possible statuses.)

Official Development Assistance

Other Official Flows

Vague (Official Finance)

Flows categorized based on OECD-DAC guidelines

Project lifecycle

Status

Pipeline: Commitment (The next section lists the possible statuses.)

Pledge

Commitment

Implementation

Completion

Suspended

Cancelled

Milestones

Commitment year

2011

2009-12-08

Planned implementation start

Description

On December 8, 2009, China Development Bank (CDB) pledged to provide the Government of Ghana with a $3 billion loan for package of projects, the majority of which would be related to infrastructural development. Then, on December 16, 2011, China Development Bank and the Government of Ghana signed a $3 billion master facility agreement. This agreement established two lending facilities: Tranche A and Tranche B. Tranche A is a $1.5 billion facility and any borrowings through this facility are undertaken with a 15 year maturity, 5 year grace period, an interest rate of 6-month LIBOR plus a 2.95% margin, a 0.25% upfront fee, and a 1% commitment fee. Tranche B is a $1.5 billion facility and any borrowings through this facility are undertaken with a 10 year maturity, 3 year grace period, an interest rate of 6-month LIBOR plus a 2.85% margin, and a 1% commitment fee. The borrower is responsible for repaying CDB every six months at the end of each interest period. This project captures Tranche A. Tranche B is captured in #85282. Also, under the terms of the master facility agreement, the borrower is required to maintain a balance of 1.5 times the repayment amount (for each six month cycle) in a designated “Debt Service Reserve Account” at all times. Additionally, to facilitate repayment of the loan principal and interest, the Ghana National Petroleum Corporation (GNPC) and the China International United Petroleum and Chemicals Co. (UNIPEC Asia) signed an offtaker for the sale and purchase of crude oil. Under the terms of this agreement, GNPC agreed to supply and sell 13,000 barrels of crude oil from Jubilee Field each day to UNIPEC Asia over a 15.5 year period. The proceeds from these oil sales were then deposited into a special account to facilitate loan repayment and provide a source of collateral. The parties agreed that the term of the offtaker agreement should extend beyond the repayment period of the loan to allow CDB to be fully repaid if necessary. The projects that were initially identified as eligible for funding through Tranche A included the Western Corridor Renewal Project, the Western Corridor Infrastructure Renewal Project, the Sekondi Free Zone Project, Accra Plains Irrigation Project Phase 1, Coastal Fishing Landing Sites Project, Eastern Corridor Multi-Modal Transportation Project. Projects that were initially identified as eligible for funding through Tranche B included Western Corridor Gas Infrastructure Project, Takoradi Petroleum Terminal Project, Western Corridor 'Oil Enclave' Toll Road Redevelopment Project, ICT Enhanced Surveillance Project (also known as Integrated National Security Communications Enhancement Project), the Accra Intelligent Traffic Management Project, and the SME Projects Incubation Facility. Under the terms of the master facility agreement, subsidiary loan agreements must be negotiated to secure financial support for any given project. On June 13, 2012, China Development Bank and the Government of Ghana signed the first subsidiary loan agreement worth $850 million — using the Tranche B lending facility — for the Western Corridor Gas Infrastructure Development Project (WCGIDP) (captured in #58586). In April 2013, China Development Bank and the Government of Ghana signed the second subsidiary loan agreement worth $150 million — using the Tranche B lending facility — for the ICT Enhanced Surveillance Project. Then, in mid-2014, the Government of Ghana sought to cap the value of the master facility agreement at $1.5 billion. However, the parties reportedly came to an impasse when CDB requested an additional 2,000 barrels of oil per day beyond the original 13,000 barrels specified in the original off-taker agreement. According to Ghana’s Vice President, Dr. Mahamudu Bawumia, the master facility agreement was “unfrozen” and reactivated in 2017. Then, in 2018, China Development Bank and the Government of Ghana signed the third subsidiary loan agreement worth $185,570,000 — using the Tranche B lending facility — for the Coastal Fishing Landing Sites Project. This project was originally identified as eligible for lending through the Tranche A facility; however, the Government of Ghana and CDB agreed to fund it through the Tranche B facility and shorten the maturity of the loan to ensure that the off-taker agreement did not extend beyond its current term. As such, the terms of lending for this project (9 year maturity, 3 year grace period, 6-month LIBOR plus a 2.85% margin, and a 1% commitment fee) were slightly different than the terms specified for lending through the Tranche B facility in the master facility agreement signed on December 16, 2011. In 2018, China Development Bank and the Government of Ghana also signed the fourth subsidiary loan agreement worth $210,660,000 — using the Tranche B lending facility — for the Accra Intelligent Traffic Management Project. #58586 captures the $850 million subsidiary loan agreement for the Western Corridor Gas Infrastructure Development Project (WCGIDP). #60039 captures the $150 million subsidiary loan agreement for the ICT Enhanced Surveillance Project (also known as Integrated National Security Communications Enhancement Project. #30578 captures the $185,570,000 subsidiary loan agreement for the Coastal Fishing Landing Sites Project. #73140 captures the $210,660,000 million subsidiary loan agreement for the Accra Intelligent Traffic Management Project.

Additional details

The interest rate is calculated by taking the 6M LIBOR rate in December 2011 (0.780%) + 2.95% margin = 3.73%.

Number of official sources

10

Number of unofficial sources

40

Download the dataset

Details

Cofinanced

No

Receiving agencies [Type]

Government of Ghana [Government Agency]

Implementing agencies [Type]

China Petroleum & Chemical Corporation (Sinopec Ltd.) [State-owned Company]

Loan type

Concessional

Maturity

15 years

Interest rate

3.73%

Grace period

5 years

Commitment fee

1.0

Grant element

36.96282276%

Gurarantee provided

No

Insurance provided

No

Collateralized/securitized

Yes

Collateral

Ghana National Petroleum Corporation (GNPC) and the China International United Petroleum and Chemicals Co. (UNIPEC Asia) signed an offtaker for the sale and purchase of crude oil. Under the terms of this agreement, GNPC agreed to supply and sell 13,000 barrels of crude oil from Jubilee Field each day to UNIPEC Asia over a 15.5 year period. The proceeds from these oil sales were then deposited into a special account to facilitate loan repayment and provide a source of collateral.