China Eximbank provides $13.297 million buyer’s credit loan for Malanje Secondary School Construction Project and Huíla Polytechnic Institute and Secondary School Construction Project (linked to #34030, #34777, #34778)
Constant 2017 USD
Funding agency [Type]
Export-Import Bank of China [State-owned Policy Bank]
Education (Code: 110)
Export Buyer's Credit
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 $13,297,500 subsidiary buyer’s credit loan agreement to support “complementary actions” related to the Malanje Secondary School Construction Project and the Huíla Polytechnic Institute and Secondary School Construction Project (See: UNCOVERING AGENCY: ANGOLA’S MANAGEMENT OF RELATIONS WITH CHINA, p. 289). The proceeds of this loan were used to partially finance a $14,775,000 commercial contract with Sinohydro. This project involved the construction of a secondary school and a technical school in Huíla Province and 2 secondary schools in Malanje, the capital city of the Malanje Province.The purpose of the Malanje Secondary School Construction Project, which employed 71 Angolan workers and 33 Chinese workers, was the construction of 2 secondary schools in Malanje (Malange) Province. The contract supporting the project went into effect on 20 March, 2006; and the estimated project handover date was 18 September, 2007. The construction of one of the schools, located in Malanje, the capital city of the province, began 18 June, 2006 and was finished 19 February, 2008 (See: Malanje Secondary School Project (completed project)). The implementation status of the other school is unknown.The purpose of the Huíla Polytechnic Institute and Secondary School Construction Project, which employed 150 Angolan workers and 45 Chinese workers, was to construct a polytechnic Institute and secondary school in Huíla Province. The contract for this project went into effect on 17 April, 2006, and the projected handover date was 11 October, 2007. The project was ultimately completed, according to SAIS-CARI, but its precise implementation start and end dates are unknown.
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]
SinoHydro [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).