Narrative
Full Description
Project narrative
In 2010, EEPCO signed a $199,580,000 loan agreement with the Export-Import Bank of China for the Gibe III Hydro Power Transmission and Transformation Line Project. The estimated borrowing terms of the loan, which was backed by a sovereign guarantee, include an interest rate of 2%, a grace period of 8 years, and a maturity of 21 years. The purpose the project was to evacuate power from the Gibe III hydroelectric power plant via the construction of electricity transmission lines. The project was completed and put into operation in 2014.
Staff comments
1. The face value of the loan ($199.58 million) is identified by MOFED via the following sources (https://www.sciedupress.com/journal/index.php/jms/article/viewFile/25488/16079 and https://www.dropbox.com/scl/fi/5nwg72mj7unyc41tgsmh1/List-of-Ethiopia-China-Cooperation-Major-Projects-from-Ethiopia-s-Ministry-of-Finance-September-2024.xlsx?rlkey=v9vjryd8kmq0bzshgocuma6mb&dl=0). 2. This China Eximbank loan was not included in the database of Chinese loan commitments that SAIS-CARI released in 2020 and re-released in 2021. Nor was it included it in the Chinese Loans to Africa (CLA) Database — that is maintained by Boston University's Global Development Policy Center — as of August 2024. 3. According to the World Bank's Debtor Reporting System (DRS), ‘private’ sector lending from all Chinese creditors to government and government-guaranteed borrowing institutions in Ethiopia was $669,046,000 in 2010. $669,046,000 is nearly identical to the sum of the face value of the $199.58 million China Eximbank loan that supported the Gibe III Hydro Power Transmission and Transformation Line Project and the $470 million ICBC loan that supported the 1870MW Gilgel Gibe III Hydropower Project in 2010. However, the apparent treatment of China Eximbank as a 'private' sector creditor suggests that the $199.58 million may have been a syndicated loan (with China Eximbank participation). This issue warrants further investigation. See https://www.dropbox.com/scl/fi/g794svts1vdwnvksjllsh/August-2024-IDS-Download-Ethiopia-s-Borrowings-and-Borrowing-Terms-from-Private-Sector-PRC-Creditors.xlsx?rlkey=i6j0mqp1jrx5en6xll3ebgl3g&dl=0 4. The borrowing terms of the China Eximbank loan for the Gibe III Hydro Power Transmission and Transformation Line Project are unknown. For the time being, AidData assumes that the borrowing terms that applied to the China Eximbank loans for the Gibe III-Addis Ababa Power Transmission Lines Project and the Gibe III-Addis Ababa Substations Project (an interest rate of 2%, a grace period of 8 years, and a maturity of 21 years) also applied to the China Eximbank loan for the Gibe III Hydro Power Transmission and Transformation Line Project. This issue warrants further investigation.