China Eximbank provides $150 million preferential buyer’s credit for Unit 2 of the Chashma Nuclear Power Plant Project (Linked to Project ID#35262)

In March 2003, the Chinese Government and the Government of Pakistan signed a memorandum of understanding (MOU) for the construction of a second nuclear power plant (Chashma II) with a 300 MW capacity at Chashma, Pakistan, where a nuclear plant (Chashma I) was already installed. Then, on August 3, 2004, China Eximbank and the Government of Pakistan signed a $150 million preferential buyer’s credit (PBC) agreement [ID# BLA 04083] for Unit 2 of the Chashma Nuclear Power Plant Project (or Unit 2 of CHASNUPP). The PBC, which is captured via Project ID#35108, carried the following borrowing terms: a 3% interest rate, a 20 year maturity, and a 7 year grace period. Then, on March 31, 2005, China Eximbank and the Government of Pakistan signed a government concessional loan (GCL) agreement [CHINA EXIMBANK GCL NO. (2005) 03 TOTAL NO. (125)] worth RMB 1,598,764,499.79 (or approximately $200 million) for Unit 2 of the Chashma Nuclear Power Plant Project (or Unit 2 of CHASNUPP). The GCL, which is captured via Project ID#35262, carried a 2% interest rate but the other borrowing terms are unknown. The PBC had achieved a 69.5% disbursement rate ($104,390,000 out of $150,000,000) as of June 30, 2008, an 83.5% disbursement rate ($125,390,000 out of $150,000,000) as of June 30, 2009, and an 88.2% disbursement rate ($132,390,000 out of $150,000,000) as of June 30, 2010. PBC repayments amounts to $9,223,106.80 ($6,594,213.63 in principal and $2,628,893.17 in interest) from July 1, 2012 to June 30, 2013. The GCL had achieved a 62.2% disbursement rate (RMB 994,496,299.79 out of RMB 1,598,764,499.79) as of June 30, 2008, a 64.4% disbursement rate (RMB 1,095,731,800 out of RMB 1,598,764,499.79) as of June 30, 2009, and a 75.7% disbursement rate (RMB 1.287,251,299.09 out of RMB 1,598,764,499.79) as of June 30, 2010. GCL repayments amounted to $23,475,896.05 ($18,919,655.35 in principal and $4,556,240.70) from July 1, 2012 to June 30, 2013. The Chashma Nuclear Power Plant (or CHASNUPP) is a large commercial nuclear power plant located in the vicinities of Chashma colony and Kundian in Punjab in Pakistan. Its exact locational coordinates are 32.390278, 71.4625. The purpose of the China Eximbank-financed project was to construct a second unit (CNP-300 reactor) at the power plant (known as C2 or CHASNUPP-II) with nominal difference of generating a gross electrical capacity of 325 MWe with a net output of about 300 MW. China Zhongyuan Engineering Company (CZEC) was the contractor responsible for project implementation. Construction began on April 8, 2005. The Chashma II power plant was officially inaugurated on May 10, 2011. There are some indications that the China Eximbank preferential buyer's credit for Unit 2 of the Chashma Nuclear Power Plant Project financially underperformed vis-a-vis the original expectations of the lender. On or around July 1, 2020, China Eximbank and the Government of Pakistan signed a debt suspension agreement. Under the terms of the agreement, the lender agreed to suspend principal and interest payments due between July 1, 2020 and December 31, 2020 under the preferential buyer's credit agreement for Unit 2 of the Chashma Nuclear Power Plant Project. Then, on November 19, 2020, China Eximbank and the Government of Pakistan signed another debt suspension agreement [No. DSSI2021PHASE1-033]. Under the terms of the agreement, the lender agreed to suspend principal and interest payments due between January 1, 2021 and June 30, 2021 under the preferential buyer's credit agreement for Unit 2 of the Chashma Nuclear Power Plant Project. Then, on or around July 1, 2021, China Eximbank and the Government of Pakistan signed another debt suspension agreement. Under the terms of the agreement, the lender agreed to suspend principal and interest payments due between July 1, 2021 and December 31, 2021 under the preferential buyer's credit agreement for Unit 2 of the Chashma Nuclear Power Plant Project. The debt service suspension (rescheduling) from July 2020-December 2020 is captured via Project ID#96254. The debt service suspension (rescheduling) from January 2021-June 2021 is captured via Project ID#96245. The debt service suspension (rescheduling) from July 2021-December 2021 is captured via Project ID#96253.

Additional details

1. This project is also known as the C2 Project and the CHASNUPP-II Project. The Chinese project title is 恰希玛核电2号机组. 2. The Ministry of Economic Affairs (EAD) project identification number for the GCL is 2368. The EAD project identification number for the PBC is 2369. 3. Some official sources identify the face value of the GCL as RMB 1.7 billion. 4. The debt suspension agreement [No. DSSI2021PHASE1-033] can be accessed in it entirety via https://www.dropbox.com/s/n69i598f0fg7s80/6.%20Debt%20Suspension%20Agreement%20for%20PBC%20C2.pdf?dl=0.

Number of official sources

10

Number of total sources

30