Project ID: 30236

China Eximbank pledge $1.5 billion loan to Ethiopian Railways Corporation for Mekelle-Weldiya Railway Construction Project

Pledged amount

$ 1474728318.0

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.

Summary

Funding agency [Type]

Export-Import Bank of China [State-owned Policy Bank]

Recipient

Ethiopia

Sector

Transport and storage (Code: 210)

Flow type

Loan

Concessional

Vague

Category

Intent

Development (The next section lists the possible statuses.)

Commercial

Development

Representational

Mixed

Financial Flow Classification

Vague (Official Finance) (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: Pledge (The next section lists the possible statuses.)

Pledge

Commitment

Implementation

Completion

Suspended

Cancelled

Milestones

Commitment year

2015

2015-07-01

Planned completion

Geography

Description

In January 2015, the Export Import (EXIM) Bank of China agreed to loan the Ethiopian Railways Corporation (ERC) $1.5 billion for the construction of the Mekelle-Weldiya railway (see 'Mekelle-Weldiya Railway (268KM)' from IJGlobal). In June 2012, the ERC and the Chinese state-owned China Communications Construction Co. (CCCC) signed a railway agreement worth $1.5 billion. CCCC is the contractor and the EXIM Bank of China is providing financing for the project. Initially, non-Chinese financiers were going to provide funding for the project, but the ERC was unable to secure said funding from those sources and subsequently turned to the EXIM Bank of China to finance the project (see 'Ethiopia turns big plans into reality'). The railway line is planned to run in the Northern part of Ethiopia, connecting Mekelle and Weldiya in 268km of track. According to the Railway Gazette, construction began in February 2015 and will involve the creation of 29 bridges and 19km of tunnels. The rail line was developed to help transport potash from nearby mines that are currently being developed, but it will also carry other freight and passengers. The project interconnects states positioned in the northern parts of the country. It starts from Mekelle and then cross the Afar state and Hara market found in the northern Amhara state. After that, it crosses Awash-Kombolcha and at the end of the day it meets with the railway lines which come from the eastern part (see 'Ethiopia's New Transport Hope'). The railway project is a single track having a width of 1.435 meter standard gauge apart from running by electric power.The current status of the project and further details regarding the financing of the project are unclear. As of November 2017, the railway was 45% completed, but construction may have been temporarily halted (see 'Meqelle Dry Port Design Concludes, Construction En Route'). The project was expected to be completed in September/October 2018 (see 'Ethiopia's New Transport Hope'--the expected completion date is June 2011 on the Ethiopian Calendar, which corresponds to September/October 2018 for Gregorian calendars).According to various reports, due to debt sustainability concerns, China Eximbank has not approved this loan.

Number of official sources

2

Number of unofficial sources

13

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Details

Cofinanced

No

Receiving agencies [Type]

Government of Ethiopia [Government Agency]

Implementing agencies [Type]

China Communications Construction Co., Ltd. (CCCC) [State-owned Company]; Ethiopian Railways Corporation [Private Sector]; Government of Ethiopia [Government Agency]

Loan type

No Information

Gurarantee provided

No

Insurance provided

No