China Eximbank provides $10 million loan for Phase 1 of National Telecommunication Coverage Project (Linked to Record ID#57477, #60219, #57529, #57531, and #68940)

Project narrative

On June 19, 2006, China Eximbank and the Republic of Congo signed a $1.6 billion loan framework agreement — also known in the Republic of Congo as the “strategic partnership” (“partenariat stratégique”) — that allowed the Republic of Congo to obtain China Eximbank loans for infrastructure projects through a securitization mechanism: Société Nationales des Pétroles Congolais (SNPC)—the country’s state-owned oil company—agreed to deposit a portion of the cash proceeds from its oil exports into an escrow account that is controlled by China Eximbank. This framework agreement (captured in Record ID#60219) was ratified on October 26, 2006. Two of the subsidiary loans that were approved through the framework agreement included a $70 million loan in 2008 (captured in Record ID#57477) and a $10 million loan in 2012 (captured in Record ID#30497) for Phase 1 of the National Telecommunication Coverage Project. The $10 million loan agreement was signed on September 9, 2012 and it went into force on December 10, 2012. The estimated borrowing terms for these two loans are as follows: a 0.25% interest rate, a 20-year maturity, and a 5-year grace period. The proceeds from these two loans were to be used by the borrower to partially finance a $100 million commercial contract for Phase 1. Then, in 2017, China Eximbank and the Republic of Congo signed a $62,646,626.90 loan agreement (captured in Record ID#57529) for Phase 2 of the National Telecommunication Coverage Project. This loan has a maturity length of 17 years, but its interest rate and grace period are unknown. The proceeds from this loan was to be used for the borrower to finance 85% of the cost of a $73 million commercial contract for Phase 2. Phases 1 and 2 involved the construction of a fiber optic cable (“backbone”) network (measuring more than 3000 km in length) that connects the cities of Pointe-Noire, Makoua, Dolisie, Brazzaville, Oyo and Ouesso (through an underground fibre optic cable runs between Pointe-Noire and Ouesso and between Makoua and Ouesso and through an overhead cable that piggybacks on the National Electricity Company’s EHV electricity transmission lines linked to the Moukoukoulou and Imboulou hydroelectric dams); the construction of several additional fiber optic cable segments (“branches”) that connect to the backbone (a 130 km segment from Ngo to Djambala, a 70 km segment from Loudima to Sibiti, and an 80 km segment from Oyo to Boundji); and the construction of fiber optic cable loops around the cities of Brazzaville, Pointe-Noire, Oyo, and all of the country’s departmental capitals (measuring 700 km in length). Alcatel-Lucent Shanghai Bell Co., Ltd., Huawei, and China Machinery Engineering Corporation (CMEC) were the contractors responsible for the implementation of Phases 1 and 2. The project officially commenced in August 2010. In January 2013, the project achieved provisional acceptance of one segment of the fiber optic cable (“backbone”) network between Pointe-Noire and Brazzaville (measuring more than 510 km in length). As of February 2014, it had nearly completed another segment of the backbone: from Brazzaville to Owando (510 km in length) and then onward to city of Ouesso. Phases 1 and 2 were eventually completed, but their precise completion dates are unknown.