Project ID: 33946

CMC provides $71 million supplier’s credit for Karnaphuli Paper Mills Modernization Project

Commitment amount

$ 178444172.66448548

Adjusted commitment amount

$ 178444172.66

Constant 2021 USD

Summary

Funding agency [Type]

Export-Import Bank of China (China Eximbank) [State-owned Policy Bank]

Recipient

Bangladesh

Sector

Industry, mining, construction (Code: 320)

Flow type

Loan

Level of public liability

Central government debt

Infrastructure

Yes

Category

Intent

Mixed (The next section lists the possible statuses.)

Commercial

Development

Representational

Mixed

Financial Flow Classification

OOF-like (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: Commitment (The next section lists the possible statuses.)

Pledge

Commitment

Implementation

Completion

Suspended

Cancelled

Milestones

Commitment

2001-05-07

Geography

Description

On May 7, 2001, China National Machinery Import and Export Corporation (CMC) signed a supplier's credit agreement with the Government of Bangladesh for the Balancing, Modernisation, Rehabilitation and Expansion (BMRE) of the Karnaphuli Paper Mills in Chittagong. CMC, in turn, secured the funds for the supplier’s credit from an export seller’s credit from China Eximbank. The total value of the underlying commercial contract was $84 million, and China Eximbank agreed to finance approximately 85% of the commercial contract value, or $70.965 million. The supplier’s credit carried the following borrowing terms: a 16-year maturity, a 3 year grace period, and a 3.5% interest rate. The purpose of the Karnaphuli Paper Mills BMRE Project was to expand the production capacity of Karnaphuli Paper Mills from 37500 metric tons to 85500 metric tons per year, and to improve the paper quality output of the mill. In 2005, the Chinese Government reportedly agreed to convert the supplier's credit into a concessional loan. However, after the BNP-Jamaat alliance government assumed office, they ‘shelved’ the project without explanation. The idea of the project resumed again in 2014, and the loan was reportedly converted into a zero-interest loan worth $87 million. However, according to the Government of Bangladesh’s Economic Relations Division (ERD), none of the committed funding had disbursed as of June 30, 2021. Nor had the borrower made any repayments as of June 30, 2021. As such, AidData assumes that the project never reached the implementation stage.

Additional details

1. The Government of Bangladesh’s loan identification number for this supplier’s credit is S1120010507a. 2. AidData records the original terms of the supplier’s credit (as of 2001) in this record and not the amended terms.

Number of official sources

3

Number of total sources

10

Download the dataset

Details

Cofinanced

No

Direct receiving agencies [Type]

China National Machinery Import & Export Corporation (CMC) [State-owned Company]

Indirect receiving agencies [Type]

Government of Bangladesh [Government Agency]

Implementing agencies [Type]

Government of Bangladesh [Government Agency]

China National Machinery Import & Export Corporation (CMC) [State-owned Company]

Loan Details

Maturity

16 years

Interest rate

3.5%

Grace period

3 years

Grant element (OECD Grant-Equiv)

32.1599%

Bilateral loan

Investment project loan

Supplier's credit/Export seller's credit