China Eximbank provides $2.49 billion loan for the Addis Ababa–Djibouti Railway Project (linked to Record ID#61941, #70083, #70085, #70086, and #46183)

Project narrative

On 15 May 2013, China Eximbank provided a $2,490,760,000 loan to the Government of Ethiopia for the Addis Ababa–Djibouti Railway Project (or Djibouti-Ethiopia Railway Project). This $4,273,890,000 public-private partnership (PPP) project was financed with 85% debt and 15% equity. 25% of the debt came from an Ethiopian commercial bank and 60% of the debt ($2.49 billion) came from China Eximbank. The original lending terms were as follows: 15 year maturity, 6 year grace period, and an interest rate of LIBOR plus a 3% margin. 6 Month LIBOR rate not identified in reports, so the average 6 Month LIBOR rate from May 2013 (when the financing agreement was signed) is used in the interest rate calculation, which is 0.421%. Total interest rate is 0.421% + 3% = 3.421. China Eximbank provided this loan through three separate loan tranches. One tranche is worth $220,471,000 (covered in Record ID#70083), the second is worth $981,260,000 (covered in Record ID#70085), and the third is worth $1,289,029,000 (covered in Record ID#70086). The loan was also insured by China Export and Credit Insurance Corporation (SINOSURE). However, the loan was restructured in 2018 when China Eximbank agreed to extend the maturity by 20 years (see Record ID#61941). Sinosure reportedly had to write off US$1 billion in losses due to the poor commercial performance of the Addis Ababa–Djibouti Railway Project. In 2011, Ethiopian Railway Corporation awarded China Railway Engineering Corporation (CREC) a $1.4 billion contract to build the 330 km Sebeta/Addis Ababa to Miesso section, and China Civil Engineering Construction Corporation (CCECC) a 579 million USD contract for the 339 km from Miesso to Ethiopia's border with Djibouti. Track laying for the railway began in May 2015 . On October 4-5, 2016, the railway was opened . Then, on July 28, 2016, CCECC signed the Addis Ababa-Djibouti Railway Operation Management Service Contract on behalf of China Earth Group and China Railway Joint Venture‚ with Ethiopian Railway Company and Djibouti Railway Company, creating a public private partnership (PPP), and the railway was opened to traffic in October 2016 . In January 2017, Ethiopia and Djibouti signed an agreement to establish a joint company that would manage the railway . Ethio-Djibouti Standard Gauge Railway Share Company (or Ethio-Djibouti Railway) was then established in April 2017. On December 31, 2017, Ethiopian Railway Company issued the Yaji Railway receiving certificate to CREC and CCECC and on January 1, 2018, Ethiopia, China and Djibouti held a ceremony at the Rab Station in Addis Ababa, the starting station of the Yaji Railway Passenger Transport, officially announcing the commercial operation of the Yaji Railway and sending a round-trip freight train between Yades and Djibouti Port . On January 3, 2018. a two-way passenger train in the Ethiopian section was opened. The Yaji Railway runs passenger trains (at 120 km/hr) and cargo trains (at 80 km/hr) . It is the first modern electric railway in Ethiopia. The 759 km railway begins at Sebeta, just outside of Ethiopia's capital of Addis Ababa. The city is served by two stations in its southern outskirts, at Furi-Labu and Indode. The line then runs southeast to Modjo and Adama, both towns located in the Ethiopian Great Rift Valley. At Modjo, a railway junction exists for the planned Modjo–Hawassa Railway. In addition, at Modjo the railway is connected to the Modjo Dry Port, Ethiopia's most important inland dry port and also Ethiopia's main hub for domestic and international freight services. At Adama, the railway turns northeast towards Dire Dawa. At Awash, there is a junction with the Awash–Hara Gebeya Railway, which is under construction as of 2018. Directly after Awash station, the line crosses 60 meters above the Awash River canyon over a 155 meter long bridge, the main bridge of the railway.The railway then proceeds to Dire Dawa, where it turns and heads directly for Djibouti. Crossing the Ethiopia-Djibouti border between Dewale and Ali Sabieh, the line reaches the Djibouti passenger terminal at Nagad railway station, near Djibouti–Ambouli International Airport. CREC and CCECC are currently undertaking all the maintenance, rail captaincy and control operations through a joint venture company (Chinese name: 中土集团与中铁二局亚吉铁路联营体公司). The railway is part of phase one of Ethiopia's ambition to put in place a network of over 5,000 km of railway lines by the end of the second five-year Growth and Transformation Plan (GTP-II) period .