China Exmbank provides $53 million buyer’s credit loan for Luanda and Benguela Technical School Construction Project (Linked to Project ID#42029, #34800, #85457)
Adjusted commitment amount
Constant 2021 USD
Funding agency [Type]
Export-Import Bank of China (China Eximbank) [State-owned Policy Bank]
Education (Code: 110)
Level of public liability
Central government debt
On November 28, 2003, the Chinese Government and the Angolan Government signed a framework agreement pertaining to a special economic cooperation arrangement (Agreement name in Chinese: 中华人民共和国商务部与安哥拉共和国财政部关于两国经贸合作特殊安排的框架协议). Following the signing of the framework agreement, on March 2, 2004, China Eximbank entered into a $2 billion Master Loan Facility Agreement (MLFA) with the Government of Angola. All borrowings under the MLFA, which is an oil prepayment facility, carried the following estimated borrowing terms: a 21.5 maturity, a 1.5 year grace period, an interest rate of 3-month LIBOR plus a 1.5% margin, a 0.3% management fee, and a 0.3% commitment fee. The facility was split between a $1.0 billion Phase I facility and a $1.0 billion Phase II facility. Availability of the Phase II facility was subject to confirmation by the lender on or prior to the date falling five years after satisfaction of the conditions precedent to the MLFA and was made available by China Eximbank during that period. The MLFA is a framework agreement under which the Government of Angola and China Eximbank may conclude individual buyer’s credit loan agreements (ILAs or subsidiary loan agreements) for the purpose of financing up to 90% of the contract price owing to certain contractors in respect of certain contracts. The first tranche of the facility was released in December 2004. The facility was fully drawn down as of December 31, 2017. Sonangol provided a source of collateral under the MLFA, and repayments were made with the proceeds of oil sales from Sonangol to UNIPEC (China international United Petroleum & Chemicals Co. Ltd, Sinopec group), which were deposited in an Angolan Ministry of Finance (MINFIN) account at China Eximbank. The volume of oil to be sold to UNIPEC each month for repayment of the loan varied according to market oil prices. Under the agreement, 70% of works have to be contracted with Chinese companies and the same proportion of construction material, equipment and labour has to be contracted in China. Loan disbursements were made on a project-by-project basis. Tendering, management and payments were jointly managed by the Chinese Ministry of Commerce and the Angolan Ministry of Finance (which coordinated the various Angolan line ministries responsible for supervising the projects). The Angolan Ministry of Finance submitted the projects for tendering; China Eximbank selected Chinese candidate firms for the projects; and a joint commission made the final firm selections. The process was managed by an office in the Angolan Ministry of Finance -- known as Gabinete de Apoio Técnico (GAT) -- that was specifically created to manage the MLFA with China Eximbank. Then, in March 2005, China Eximbank and the Government of Angola signed a $53,044,838.28 subsidiary buyer’s credit loan agreement for the Luanda and Benguela Technical School Construction Project. The proceeds of the loan were used to partially finance a $58,938,709.20 commercial contract with China Machinery Engineering Corporation (CMEC), which was signed on March 10, 2005. The project also received a supplementary $26,564,950 loan from China Eximbank through a $500 million credit line (as captured via Project ID#34030), which was extended to the Government of Angola on July 19, 2007. This subsidiary loan carried the following borrowing terms: a 21.5 maturity, a 1.5 year grace period, an interest rate of 3-month LIBOR plus a 1.5% margin, a 0.3% management fee, and a 0.3% commitment fee. The proceeds of the loan were used to partially finance a supplementary commercial contract with SINOMACH worth $29,515,500. Project ID#34776 captures the first loan, while Project ID#34800 captures the second, supplementary loan. The project involved the construction and equipping of four technical schools in the Sambizanga, Cacuaco, Cazenga and Viana localities within Luanda Province and two technical schools in Bairro de Marco in Lobito city in Graça city within Benguela Province. CMEC was the EPC contractor responsible for project implementation. The EPC contract supporting the project went into effect on March 20, 2006 and the originally expected project handover date was May 22, 2007. The implementation of the project commenced on April 17, 2006 and it reached completion on June 18, 2007. The school in the Sambizanga municipality (Instituto Médio Politécnico do Sambizanga) was inaugurated on June 12, 2007.
1. The Portuguese project title is Construção e Apetrechamento de 2 Institutos Politécnicos na província de Benguela e de 4 Institutos Politécnicos na província de Luanda. 2. This project was part of Phase I of the commercial contract between Sinomach and the Ministry of Education in Angola to construct 28 schools (captured via Project#85457). Phase 1 commenced on April 17, 2006 and was completed on June 18, 2007. 3. The 2003 framework agreement (中华人民共和国商务部与安哥拉共和国财政部关于两国经贸合作特殊安排的框架协议) specified that Sinosure would be signing relevant agreements with the Government of Angola. Therefore, AidData has coded Sinosure as an accountable agency and as providing insurance for the loan. 4. AidData considers this loan to be collateralized in a de facto sense. The cash deposited by the Angolan Ministry of Finance into a bank account controlled by China Eximbank is, for all intents and purposes, a source of collateral. This is true even if the lender does not have a formal security interest in the account. 5. AidData relies on the maturity, grace period, and interest rate that are recorded in the World Bank's Debt Reporting System (a 3.0899% interest rate, a 21.5 year maturity, and a 1.5 year grace period). See https://www.dropbox.com/s/ab8qt4n6jijcbhd/IDS_Average%20interest%20on%20new%20external%20debt%20commitments.xlsx?dl=0 and https://www.dropbox.com/s/949n5rctiue6d7c/IDS_Average_grace_period_and_maturity_on_new_external_debt_commitments.xlsx?dl=0 and https://www.dropbox.com/s/2sw4f7gluxa52fk/DRS%20Official%20Commitments%20from%20China%20Through%202021.xlsx?dl=0 and https://www.dropbox.com/s/0vpohwt96l40o19/World%20Bank%20DRS%20Extract%20Sep%202021%20--%20Chinese%20Loan%20Commitments%20from%202013%20to%202019.xlsx?dl=0 6. According to another World Bank source (https://documents1.worldbank.org/curated/pt/122781468002433388/pdf/397100v20ER0P01disclosed0Feb0602008.pdf), all borrowings under the MLFA carried a management fee (comissão de gestão) of 0.3%; a commitment fee (comissão de imobilização) of 0.3%, and an installation fee (comissão de instalação) of 1%.
Number of official sources
Number of total sources
Direct receiving agencies [Type]
Government of Angola [Government Agency]
Implementing agencies [Type]
China Machinery Engineering Corporation (CMEC) [State-owned Company]
Angola Ministry of Education [Government Agency]
Insurance provider [Type]
China Export & Credit Insurance Corporation (Sinosure) [State-owned Company]
Collateral provider [Type]
Sociedade Nacional de Combustiveis de Angola (Sonangol) [State-owned Company]
Sonangol provided a source of collateral under the MLFA, and repayments were made with the proceeds of oil sales from Sonangol to UNIPEC (China international United Petroleum & Chemicals Co. Ltd, Sinopec group), which were deposited in an Angolan Ministry of Finance (MINFIN) account at China Eximbank. The volume of oil to be sold to UNIPEC each month for repayment of the loan varied according to market oil prices.
Grant element (OECD Grant-Equiv)