China Eximbank provides $9,024,750 buyer’s credit loan for Luanda and Benguela Secondary School Construction and Equipping Project (linked to #34030, #34775)
Constant 2017 USD
Funding agency [Type]
Export-Import Bank of China [State-owned Policy Bank]
Education (Code: 110)
Export Buyer's Credit
On 28 September, 2007, China Eximbank and the Government of Angola signed a $9,024,750 buyer’s credit loan agreement to support “complementary actions” related to the Luanda and Benguela Secondary School Construction and Equipping Project (See: UNCOVERING AGENCY: ANGOLA’S MANAGEMENT OF RELATIONS WITH CHINA, p. 289). The project was financed through a $500 million master loan facility agreement (MLFA) that China Eximbank and the Government of Angola signed in July 2007 (see Project ID#34030). All subsidiary loans approved through this MLFA carried the same borrowing terms: an interest rate of 6.86% (3-month Libor + a 1.5% margin), a 22 year maturity, and a 5 year grace period. The proceeds of the subsidiary loan were used to partially finance a $10,027,500 commercial contract with Sinomach.The purpose of this project, which employed 15 Angola workers and 39 Chinese workers, was to construct and equip three secondary schools in the Viana [Sapú], Cacuaco and Nova Vida localities within Luanda Province, and construct and equip one secondary school in the Massangarala locality within Benguela Province. It was originally scheduled to commence on 20 March, 2006; and various components of the project were scheduled for completion on 30 April, 2007, 12 July, 2007, and 25 October, 2007 (See: LINHA DE CRÉDITO COM O EXIMBANK DA CHINA PROJECTOS CONCLUÍDOS). The project was ultimately completed, according to SAIS-CARI, but its precise implementation start and end dates are unknown.China Eximbank had previously provided a $16.1 million buyer's credit loan for this project, which is captured in linked Project ID#34775.
The Portuguese project title is Construção e Apetrechamento de 1 Escola Secundária na província de Benguela e de 3 Escolas Secundárias na província de Luanda.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
Number of unofficial sources
Receiving agencies [Type]
Government of Angola [Government Agency]
Implementing agencies [Type]
China National Machinery Industry Corporation (Sinomach) [State-owned Company]
Accountable agencies [Type]
Sonangol provided a source of collateral for the loan, and repayment is to be done with the proceeds of oil sales from Sonangol to UNIPEC (China international United Petroleum & Chemicals Co. Ltd, Sinopec group), which are to be deposited in the Angolan Ministry of Finances (MINFIN) account at China Eximbank (See: China’s Oil Diplomacy: Comparing Chinese Economic Statecraft in Angola and Brazil, p. 148). The volume of oil to be sold to UNIPEC each month for repayment of the loan, varies 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 (See: China’s Oil Diplomacy: Comparing Chinese Economic Statecraft in Angola and Brazil, p. 149).