Project ID: 34898

China Eximbank provides $48.606 million buyer’s credit loan for Phase 2 of Caxito, Gandjelas, Luena, and Wako-Kungo Irrigation System Project (linked to #42029, #34784)

Commitment amount

$ 75895523.94

Constant 2017 USD

Summary

Funding agency [Type]

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

Recipient

Angola

Sector

Agriculture, forestry, fishing (Code: 310)

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

2007

Implementation

2008

2007-09-18

Planned start

2008-07-01

Actual start

Completion

2009

2009-03-18

Planned

2009-07-24

Actual

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 April 2007, China Eximbank and the Government of Angola signed a $48,606,262.20 subsidiary buyer’s credit loan agreement for Phase II of Caxito, Gandjelas, Luena, and Wako-Kungo Irrigation System Project (See: UNCOVERING AGENCY: ANGOLA’S MANAGEMENT OF RELATIONS WITH CHINA, p. 286 and LINHA DE CRÉDITO COM O EXIMBANK DA CHINA RELATÓRIO DAS ACTIVIDADES DESENVOLVIDAS II TRIMESTRE DE 2008, p. 20). The proceeds of this loan were used to partially finance a $54.006,958.00 commercial contract with Sinohydro, which was signed on 26 April, 2007 (See: 水电建设集团安哥拉农业灌溉项目二期正式签约).The purpose of this project was to facilitate the irrigation and reparcellng of the agricultural fields in the irrigated perimeters created during the first phase of the project (see Project ID#34784). Phase I and Phase II activities took place in the locality of Caxito within Bengo Province, the locality of Gandjelas within Huila Province, the locality of Luena within Moxico Province, and the locality of Wako-Kungo within Kwanza Sul Province (See: Angola, wide-scale irrigation project).The contract supporting the project went into effect on 18 September, 2007; and the estimated project handover date was 18 March, 2009 (See: LINHA DE CRÉDITO COM O EXIMBANK DA CHINA RELATÓRIO DAS ACTIVIDADES DESENVOLVIDAS II TRIMESTRE DE 2008). The project officially commenced on 1 July, 2008 and ended on 24 July, 2009 (See: 中国水电集团完成安哥拉马吐布农业灌溉二期工程).One specific sub-projects associated with the Phase II of Caxito, Gandjelas, Luena, and Wako-Kungo Irrigation System Project was the $28 million reconstruction of Ganjelas Hydroelectric Dam (See: Africa Dams Briefing 2010). Construction began November 2005 and completed January 2009 (See: China-Angola aid relations: strategic cooperation for development?). The infrastructure irrigates its perimeter with an extension of 2,150 hectares. The project also includes an irrigation channel through the municipality of Chibia (See: Africa Dams Briefing 2010). Chibia's irrigation channel covers an area of 1400 hectares of arable land and the dam stores a volume of 3.5 million cubic meters of water. The Chibia municipality is a small farming community of just 133,000 inhabitants, with some 60 farming associations and cooperatives.This project is not to be confused with the Ganjelas mini-dam, which was constructed in 2014 (alternative spellings of Ganjela include Gandjelas, Nganjelas, Ngandjelas, Gangelas)

Additional details

The Portuguese project title is Irrigação das localidades do Luena, Caxito, Gandjelas e Waco-Kungo (Fase 2). The Chinese project title is 安哥拉农业灌溉二期 or 安哥拉四地区农业灌溉二期项目. 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

8

Number of unofficial sources

10

Download the dataset

Details

Cofinanced

No

Receiving agencies [Type]

Government of Angola [Government Agency]

Implementing agencies [Type]

Government of Angola [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).