China Eximbank provides $551.08 million debt financing package for 147MW Adjarala Hydroelectric Power Plant Project (Linked to #58671, #58674, and #68762)

In 2004, the Government of Togo and the Government of Benin hoped to begin construction of the 147MW Adjarala Hydroelectric Power Plant but a disagreement over the terms of financing took years to resolve. On January 26, 2008, an MoU was signed between China Hydropower Group International Corporation and the Government of Benin for the possible construction of the power plant. In 2009, Sinohydro and Communauté Electrique du Bénin (CEB) — an inter-governmental organization (owned by the Government of Benin and the Government of Togo) that is responsible for developing electricity infrastructure in Togo and Benin and reducing these countries’ dependence upon Ghana for energy imports — signed a $388 million commercial contract for the 47MW Adjarala Hydroelectric Power Plant Project. However, in order to cover additional project costs, the Government of Benin turned to international donor organizations — including the World Bank, African Development Bank, and others — in 2013. These organizations expressed initial interest in financing the project, seemingly until the United States began to oppose funding for large new dams worldwide. Ultimately, the international donor community opted not to support the project and China Eximbank subsequently pledged a financing package worth $551.08 million (captured via this umbrella project, ID#2170). On December 15, 2015, China Eximbank and the Government of Benin signed a $211.31 million preferential buyer’s credit (PBC) agreement for the Adjarala Hydroelectric Power Plant Project. The PBC carries the following terms: 20-year maturity, 7-year grace period, and a 2% interest rate (See: page 9 of RAPPORT SUR LA GESTION DE LA DETTE PUBLIQUE AU TITRE DE L’ANNEE 2015). Then, on July 12, 2016, China Eximbank and the Government of Benin signed an RMB 400 million government concessional loan (GCL) agreement for the Adjarala Hydroelectric Power Plant Project. The GCL carries the following terms: 20-year maturity, 7-year grace period, and a 2% interest rate. China Eximbank also signed a $61 million loan agreement with the Government of Togo on May 23, 2016 for this project. The PBC is captured in Project ID#58674 and the GCL is captured in Project ID#58671. The loan issued to the Government of Togo is captured in Project ID#68762. The proceeds from these three loans were on-lent by the Government of Benin and the Government of Togo to CEB. CEB used these loan proceeds to finance a FCFA 265,814,526,897 commercial contract that it signed with Sinohydro on April 25, 2014. This project involves the construction of a dam in Adjarala, which is located approximately 100 km downstream of the 65MW Nangbéto hydropower plant on the Mono River. The dam will stand 40 meters tall, with a 3.7 long kilometer reservoir. The project also involves the construction of 252 kilometers of 161 KV high voltage power transmission lines, water diversion systems, plants, access roads and other ancillary facilities. The ultimate objective of the project is to strengthen regional energy interconnection and alleviate electric power shortages in Benin and Togo. Sinohydro is the contractor responsible for implementation. A groundbreaking ceremony took place on December 26, 2015. Then, in December 2016, the project was suspended after the Togolese Minister of Economy and Finance announced that there were insufficient financial resources to complete the project. The project resumed in January 2017, and as of September 2017 it was still under construction.

Additional details

This project is also known as the 3x49MW Adjarala Hydroelectric Power Plant Project. The Chinese project title is 阿贾哈拉水电站项目 or 貝寧--多哥阿賈哈拉水電站項目. The French project title is Aménagement hydroélectrique d’Adjarala or Projet d'aménagement du barrage hydroélectrique d'Adjarala. In the database of Chinese loan commitments that SAIS-CARI released in July 2020, it identifies a single $229 million “concessional loan” from China Eximbank to the Government of Benin for this project. However, the Government of Benin’s Caisse Autonome d'Amortissement (CAA) records two separate loans from China Eximbank: a $211.31 million preferential buyer’s credit and an RMB 400 million government concessional loan. These two loans were independently ratified by Benin’s Parliament, and in May 2018 email correspondence with AidData’s Executive Director, the Coordinator of the IMF Program in Benin’s Ministry of Economy, and Finance confirmed the receipt of two separate China Eximbank loans for the 147MW Adjarala Hydroelectric Power Plant Project. AidData relies on the loan data published by CAA.

Number of official sources

20

Number of unofficial sources

19