Project ID: 34841

China Eximbank provides $10.81 million buyer’s credit loan for 3 Malanje Health Center Construction and Equipping Project (linked to #42029, #34832)

Commitment amount

$ 20359973.22

Constant 2017 USD

Summary

Funding agency [Type]

Export-Import Bank of China [State-owned Policy Bank]

Recipient

Angola

Sector

Health (Code: 120)

Flow type

Export Buyer's Credit

Concessional

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

Completion (The next section lists the possible statuses.)

Pledge

Commitment

Implementation

Completion

Suspended

Cancelled

Milestones

Commitment year

2005

Implementation

2006

2006-08-01

Planned start

2006-03-09

Actual start

Completion

2010

2007-08-10

Planned

2010-04-16

Actual

Geography

Description

On 28 November, 2003, China and Angola 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 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). According to the World Bank, this MLFA has a management commission fee of 0.3%, an installation commission fee of 1%; and an immobilization fee of 0.3% (See: Angola Public Expenditure Review (In Two Volumes) Volume II: Sectoral Review, p. 19).Sonangol provided a source of collateral for loans 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 (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 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 (See: China’s Oil Diplomacy: Comparing Chinese Economic Statecraft in Angola and Brazil, p. 149).Then, in May 2005, China Eximbank and the Government of Angola signed a $10,809,387.90 subsidiary buyer’s credit loan agreement for the Malanje Health Center Construction and Equipping Project (See: UNCOVERING AGENCY: ANGOLA’S MANAGEMENT OF RELATIONS WITH CHINA, p. 280). The proceeds of this loan were used to partially finance a $12,010,431.00 commercial contract between Sinohydro and the Angola Ministry of Health, which was signed on 9 May, 2005 (See: UNCOVERING AGENCY: ANGOLA’S MANAGEMENT OF RELATIONS WITH CHINA, p. 280 and 中国水利水电第四工程局). The purpose of this project, which employed 77 Angolan workers and 57 Chinese workers, was to construct and equip three health centers in Malanje (Malange) Province: the “Carreira de Tiro” Health Center, the Cangandala (Kangandala) Health Center, and Caculama (Kangulama) Health Center (See: LINHA DE CRÉDITO COM O EXIM BANK DA CHINA RELATÓRIO DAS ACTIVIDADES DESENVOLVIDAS II TRIMESTRE DE 2007). Each health center was to include an administrative area, waiting area, diagnosis area, treatment area, nursing beds area, and a general affairs area (including the kitchen and laundry rooms). The project involved the construction and installation of the main buildings and affiliated buildings, clear water reservoirs, oil tanks, and septic tanks.There were 2 contractual start dates for this project: 1 August, 2006 and 10 August, 2006. The scheduled handover dates were 1 November, 2007 and 10 August, 2007, respectively; however, according to Sinohydro, the project actually commenced on 9 March, 2006 and concluded on 16 April, 2010 (See: LINHA DE CRÉDITO COM O EXIMBANK DA CHINA PROJECTOS CONCLUÍDOS and Malanje Rehabilitation Center (completed project)). Also, according to the Angola’s Ministry of Finance, the health center at Caculama was eventually turned into a municipal hospital at the request of the Malanje Provincial Government.The Caculama Municipal Hospital project received additional funding in September 2007 through a $500 million credit line extension from China Eximbank (see linked Project ID#34832).

Additional details

This project is also known as the Malanje Rehabilitation Center Project. The Portuguese project title is Construção e Apetrechamento dos 3 Centros de Saúde de Malange or Construção e Apetrechamento dos 3 Centros de Saúde de Malanje. The project is referred to as 安哥拉马兰热3所康复中心项目. 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 has coded Sinosure as an accountable agency and providing insurance to the loan facility.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.

Number of official sources

6

Number of unofficial sources

3

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Details

Cofinanced

No

Receiving agencies [Type]

Government of Angola [Government Agency]

Implementing agencies [Type]

Angola Ministry of Health [Government Agency]; SinoHydro [State-owned Company]

Accountable agencies [Type]

Loan type

Concessional

Maturity

22 years

Interest rate

2.612%

Grace period

5 years

Management fee

0.3

Grant element

50.58856436%

Gurarantee provided

No

Insurance provided

Yes

Collateralized/securitized

Yes

Collateral

Sonangol provided a source of collateral for loans 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 (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 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 (See: China’s Oil Diplomacy: Comparing Chinese Economic Statecraft in Angola and Brazil, p. 149).