China Eximbank provides $429.71 million buyer’s credit loan for Caxito-Nzeto Highway Rehabilitation Project (linked to #31742)
Constant 2017 USD
Funding agency [Type]
Export-Import Bank of China [State-owned Policy Bank]
Transport and storage (Code: 210)
Export Buyer's Credit
On 28 September, 2007, China Eximbank and the Government of Angola signed a $429,710,921.10 buyer’s credit loan agreement for the Caxito-Nzeto Highway Rehabilitation Project (See: UNCOVERING AGENCY: ANGOLA’S MANAGEMENT OF RELATIONS WITH CHINA, p. 293 and LINHA DE CRÉDITO COM O EXIMBANK DA CHINA RELATÓRIO DAS ACTIVIDADES DESENVOLVIDAS II TRIMESTRE DE 2008, p. 22). The project was financed through a $2 billion master loan facility agreement (MLFA) that China Eximbank and the Government of Angola signed in September 2007 (see Project ID#31742). All subsidiary loans approved through this MLFA carried the same borrowing terms: an interest rate of 7.008% (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 $477,456,579 commercial contract with China Road and Bridge Corporation (CRBC), which was signed on 17 May, 2007 (See: 中交中国路桥与安哥拉签署6.6亿美元的合同项目).The purpose of this project was to rehabilitate a 208 km two-way dual-lane expressway that runs from the coastal city of Nzeto (N'Zeto) to the city of Caxito in Bengo Province. Angola National Roads Institute (INEA) was the project owner, and Gauff Engineering was the project supervisor (See: The CAXITO-NZETO Project (Phase II)). CRBC was responsible for project implementation (See: 安哥拉财政部长视察公司口行二期项目). The project commenced in December 2011 and concluded in June 2014 (See: The CAXITO-NZETO Project (Phase II) and Chinese Overseas Contracted Projects and Economic Diversification in Angola and Ethiopia 2000-2017). The road was officially inaugurated on 5 February, 2016 (See: Angola: Caxito/Nzeto National Road a Northern Region Development Factor - Minister).
This project is also known as the Phase 2 of the Caxito-N’zeto Road Project. The Chinese project title is 的口行二期Caxito-N’Zeto道路项目. The Portuguese project title is Reabilitação e Duplicação da Estrada Caxito/Nzeto.In the database of Chinese loan commitments that SAIS-CARI released in July 2020, it identifies this loan as having a face value of $477 million (equivalent to the value of the commercial contract) and a maturity length of 15 years; however, AidData records a maturity length of 22 years based on interview evidence that Dr. Ana Cristina Alves collected from Angola’s Ministry of Finance (see Project ID#31742). It also relies on the face value of the loan ($429,710,921.10) that is reported in Dr. Lucy Corkin’s book (See: UNCOVERING AGENCY: ANGOLA’S MANAGEMENT OF RELATIONS WITH CHINA).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]
Angola National Roads Institute (INEA) [Government Agency]; China Road & Bridge Corporation (CRBC) [State-owned Company]; Gauff Engineering [Private Sector]
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).