China Eximbank provides $10.767 buyer’s credit loan for Malanje Agricultural School Rehabilitation Project (linked to #34030, #34774)

On 2 March, 2004, China Eximbank and the Government of Angola signed a $2 billion Master Loan Facility Agreement (MLFA). All of the subsidiary buyer’s credit loans approved through this MLFA carried the following terms: an interest rate of 3-month LIBOR (1.112% at the time that the MLFA was signed) plus a 1.5% margin- totaling 2.612%, a 22 year maturity period, and 5 year grace period (see linked Project ID#42029).Then, in March 2005, China Eximbank and the Government of Angola signed a $15,255,315.95 subsidiary buyer’s credit loan agreement for the Malanje Agricultural School Rehabilitation Project (see project #34774) (See: UNCOVERING AGENCY: ANGOLA’S MANAGEMENT OF RELATIONS WITH CHINA, p. 278). The proceeds of this loan were used to partially finance a $19,950,351.06 commercial contract with China Machinery Engineering Corporation (CMEC), which was signed on 10 March, 2005 (See: UNCOVERING AGENCY: ANGOLA’S MANAGEMENT OF RELATIONS WITH CHINA, p. 278).Then, on 19 July, 2007, China Eximbank and the Government of Angola signed a $500 billion Master Loan Facility Agreement (MLFA). All of the subsidiary buyer’s credit loans approved through this MLFA carried the following terms: an interest rate of 3-month LIBOR plus a 1.5% margin (or 6.86% at the time that the MLFA was signed), a 22 year maturity period, and 5 year grace period (see Project ID#34030). Under this MLFA, China Eximbank and the Government of Angola signed a $10,767,600 subsidiary buyer’s credit loan agreement to support “complementary actions” related to the Malanje Agricultural School Rehabilitation Project. Project ID#34774 captures the first China Eximbank loan that supported the Malanje Agricultural School Rehabilitation Project, and this project captures the second China Eximbank loan.The purpose of this project was to rehabilitate an agricultural school in Késsua (Quéssua) locality within Malanje (Malange) Province, which is known as the Malanje Medium Agrarian Institute (IMAM). IMAM has 20 classrooms, administrative and social wards, a canteen for 500 students, boarding for 500, laundry, stores, seven laboratories, workshops and 25 residences for teachers (See: Head of State Inaugurates Malanje Medium Agrarian Institute).The contract for this project began on 9 March, 2006, and the scheduled handover date was 20 March, 2007, though an exact date for the start of this project's implementation is unclear (See: LINHA DE CRÉDITO COM O EXIMBANK DA CHINA PROJECTOS CONCLUÍDOS). President Eduardo dos Santos ultimately inaugurated the school on 8 June, 2007 (See: Head of State Inaugurates Malanje Medium Agrarian Institute).

Additional details

The Portuguese project title is Reconstrução do Instituto Agrário do Quéssua, em Malange.In July 2020, AidData asked Dr. Lucy Corkin, a leading expert on Chinese lending to Angola, whether the second, third, and fourth master loan facility agreements (MLFAs) that the Angolan Government signed with China Eximbank in 2007 and 2009 were structured as a buyer’s credit loans like the first MLFA that the Angolan Government signed with China Eximbank in 2004. Dr. Corkin noted that the second, third and fourth MLFAs were treated more like ceiling increases to the initial facility. Therefore, for the time being, AidData categorizes the second, third, and fourth MLFAs as buyer's credit loans. Sinosure is also assumed to be involved in this loan facility as 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 will be signing relevant agreements with the Government of Angola, although the nature of the agreements is unclear.AidData considers this loan to be collateralized in a de facto sense. The cash desposited 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.

Number of official sources

3

Number of unofficial sources

6