China Eximbank provides $29.9 million buyer’s credit loan for Blue Nile Agricultural Rehabilitation Project (Linked to Record ID#57039)

Project narrative

On July 29, 2008, China Eximbank and the Government of Sudan signed a $3 billion USD oil-backed master framework agreement (or line of credit) to finance various infrastructure projects (see Umbrella Record ID#57039). This resources-credit cooperation package is backed by future revenues from the sale of oil exports. Each subsidiary buyer’s credit loan (BCL) issued through the framework agreement carries a 15-year maturity and 5.6% interest rate. One of the subsidiary loans approved through this agreement in 2010 was a $29.9 million BCL for the Blue Nile Agricultural Rehabilitation Project. The proceeds from this BCL were used to finance a commercial contract signed January 3, 2010 with China CAMC Engineering Co., Ltd. The project involved the provision of construction machinery, water pumps, sprinkling irrigation equipment, dredgers and channel gate materials for the rehabilitation of the 150,000 hectare irrigation area along the bank of the Blue Nile River in Sudan’s Sinnar (Sennar or سنار) State. China CAMC Engineering Co., Ltd. was the contractor responsible for project implementation. The project was officially completed and handed over to the local authorities on June 15, 2012. There are some indications that the China Eximbank loan issued for the Blue Nile Agricultural Rehabilitation Project may have underperformed vis-a-vis lender expectations. According to Sudan’s Finance Minister Ali Mahmood Abdel-Rasool, China Eximbank suspended its financing for 11 projects in Sudan following the secession of South Sudan in July 2011, which triggered a major loss of oil revenue (a key source of collateral for China Eximbank loans). Ali Mahmood Abdel-Rasool said at the time that the Government of Sudan had previously pledged oil revenues (worth 120,000 barrels per day) to China Eximbank as a source of collateral. Then, on February 18, 2012, the Chinese Government announced that it had agreed to reschedule the outstanding debt obligations of the Government of Sudan by extending loan repayment periods by 5 years (as captured via Record ID#30421). According to the External Debt Unit of the Central Bank of Sudan, the Government of Sudan's total arrears to Chinese creditors amounted to $3.864 billion ($2.608 billion in principal, $1.129 billion in interest, and $127 million in penalty interest) as of March 31, 2022.