China Eximbank provides $65 million buyer’s credit loan for Hambantota Bunkering Project

On August 6, 2009, China Eximbank and the Sri Lanka Ports Authority (SLPA) signed a $65,094,508 buyer’s credit loan (BCL) agreement (No. BLA0902) for the Hambantota Bunkering Project. The BCL carried the following terms: 15 year maturity, 3 year grace period, interest rate of 6.5%, 0.3% commitment fee, and 0.3% management fee. This project involved the construction of a bunkering facility at Hambantota Port. The bunkering facility and tank farm are located 1.2 km from the Hambantota waterfront, and are connected to the oil terminal through a pipeline. The facility has 14 tanks (total storage of 80,000 m3). Eight of these storage tanks carry bunker oil for ships and six of the storage tank tanks carry aviation fuel and liquefied petroleum gas (LPG). This project was part of a broader effort by SLPA and the Government of Sri Lanka to position Hambantota port as a refueling and service point for cargo ships, which pass a few kilometers away off the southern tip of the country on one of the world’s busiest east-west shipping lanes. The contract for the Hambantota Bunkering Project was awarded to the China Huanqiu Contracting and Engineering Corporation. The project began in 2009 and its mechanical works were completed on October 10, 2011. Bunkering operations began after a project completion ceremony on June 22, 2014, and they are run by the SPLA. However, these operations were late suspended due to a loss of $19.9 million as a result of irregularities. 17,818 metric tons of marine gas oil were purchased by the Government of Sri Lanka for oil bunkering at the tank farm yard, but SLPA was only able to sell 3,235 metric tons due to the poor quality of oil.

Additional details

This project is also known as the Hambantota Bunkering Facility & Tank Farm Project.

Number of official sources

18

Number of unofficial sources

14