Narrative
Full Description
Project narrative
On August 21, 2012, China Eximbank and the Government of Sierra Leone (represented by the Ministry of Finance and Economic Development) signed an RMB 97,000,000 ($14,908,704) government concessional loan (GCL) agreement [CHINA EXIMBANK GCL NO. (2012) 24 TOTAL NO. (426) Series No. 10002012009210] for Phase 1 of the National Optical Fiber Backbone Project. The proceeds of the loan were on-lent by Sierra Leone’s Ministry of Finance and Economic Development to Sierra Leone Cable Limited (SALCAB), a state-owned company in Sierra Leone responsible for owning, operating, and managing the network of the National Optical Fiber Backbone Project. The GCL carried the following terms: a 2% interest rate, a 0% default (penalty) interest rate, a 5-year grace period, a 20-year maturity, a 0.5% management fee, and a 0.5% commitment fee. The borrower agreed to deposit project-related revenues in a special account to facilitate repayment. Under the original terms of the loan agreement, the borrower was responsible for making 30, equal, semi-annual principal payments (each worth RMB 6,466,666). By October 11, 2015, the loan had achieved a 100% disbursement rate ($14,908,704 out of $14,908,704). Loan disbursements included $2,971,558 on January 18, 2013, $7,883,435 on January 23, 2014, and $4,053,711 on October 11, 2015. The (principal) amount outstanding under the loan was RMB 93,469,200 as of December 31, 2015, RMB 93,469,200 as of December 31, 2016, RMB 87,002,500 as of December 31, 2017, RMB 83,769,200 as of December 31, 2018, RMB 81,124,000 as of December 31, 2019, RMB 74,775,000 as of December 31, 2020, RMB 68,544,100 as of December 31, 2021, and RMB 62,077,400 as of December 31, 2022. The proceeds of the loan were to be used by the borrower to finance a commercial contract (number 0006941103080A) between Huawei Technologies Company Limited and the Ministry of Information and Communication of the Republic Sierra Leone, which was signed on June 20, 2011. The purpose of this project was to connect Sierra Leone to international fiber that links France with South Africa and thereby provide better internet services to Sierra Leoneans. It involved the laying of 350-400 km of fiber optic cable and the establishment of ICT facilities (including internet connections) in Lungi, Port Loko, Rogbaray, Makeni, Massingbe, Sewafeh, and Koidu. Huawei Technologies was the contractor responsible for implementation. The project commenced on January 10, 2013. Then, in February 2013, the President of Sierra Leone commissioned the landing of the fiber optic cable. The project was officially completed on December 31, 2016.
Staff comments
1. This project is also known as the Phase I of the National Fibre Optic Backbone Infrastructure Project. The Chinese project title is 塞拉利昂光纤骨干网项目. 2. In the database of Chinese loan commitments that SAIS-CARI released in July 2020, it does not identify the borrowing terms of this loan. AidData relies on the maturity (20 years, grace period (5 years) and interest rate (2%) reported in the China Eximbank loan agreement that supported this project [CHINA EXIMBANK GCL NO. (2012) 24 TOTAL NO. (426) Series No. 10002012009210]. 3. The China Eximbank loan agreement can be accessed in its entirety at https://www.documentcloud.org/documents/20488797-sle_2012_466. 4. The identification number for this project in the Government of Sierra Leone’s Development Assistance Database (DAD) is SL/001923. 5. The Government of Sierra Leone loan identification number for this project is 2012284. 6. This China Eximbank loan is not recorded the China’s Overseas Development Finance Dataset, which Boston University's Global Development Policy Center published in December 2020. 7. Phase 2 of this project, which is captured via Record ID#62458, was also funded by China Eximbank. 8. Data on disbursements, repayments, and amounts outstanding can be accessed via https://www.thesierraleonetelegraph.com/wp-content/uploads/2019/12/Sierra-Leone-Auditor-General-Report-2018.pdf and https://website.auditservice.gov.sl/wp-content/uploads/2023/12/Auditor-General-Annual-Report-2022.pdf and https://website.auditservice.gov.sl/wp-content/uploads/2023/12/assl-auditor-general-annual-report-2016.pdf and https://mof.gov.sl/wp-content/uploads/2022/08/Sierra-Leone-Report-on-SOEs-_31st-August-2022-Final.pdf and https://website.auditservice.gov.sl/wp-content/uploads/2023/12/Auditor-Generals-Annual-Report-2018.pdf and https://website.auditservice.gov.sl/wp-content/uploads/2023/12/Annual-Report-on-the-Account-of-Sierra-Leone-2021.pdf and https://website.auditservice.gov.sl/wp-content/uploads/2023/12/Auditor_Generals_Annual-Report-2017_10_1_19.pdf and https://website.auditservice.gov.sl/wp-content/uploads/2023/12/Annual-Report-on-the-Account-of-Sierra-Leone-2019.pdf and https://mof.gov.sl/wp-content/uploads/2024/04/FINAL-REPORT-on-SOEs-CLEAN-24TH-APRIL-2024.pdf 9. Under Clause 6.11 of the loan agreement, "[t]he Borrower undertakes that a repayment mechanism will be established for the satisfactory of the Lender, under which a special account will be opened by the Representative of End-User in a bank acceptable by the Lender, and the revenue generated [...] from the Project will be collected and deposited into this special account, for the purpose of the payment and repayment of all due amounts under the [Loan] Agreement. The special account shall be supervised by the Borrower and the Lender shall be entitled to examine the status and all information of this special account."