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Overview

China Eximbank provides RMB 650 million seller's credit to China National Machinery Co for export of 175 railway coaches to Pakistan (Linked to Record ID#56551 and #56552)

Commitments (Constant USD, 2023)$176,695,096
Commitment Year•2003Country of Activity•PakistanDirect Recipient Country of Incorporation•China (People's Republic of)Sector•Transport And StorageFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Mar 1, 2003
First repayment
Feb 28, 2006
Last repayment
Feb 24, 2021

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Ultimate beneficial owners

At least 25% Chinese ownership

Funding agencies

State-owned Policy Banks

  • Export-Import Bank of China (China Eximbank)

Receiving agencies

State-owned companies

  • China National Machinery Import & Export Corporation (CMC)
  • Pakistan Railways

Implementing agencies

State-owned companies

  • China National Machinery Import & Export Corporation (CMC)
  • Pakistan Railways

Loan desecription

China Eximbank provides RMB 650 million seller's credit to China National Machinery Co for export of 175 railway coaches to Pakistan

Grace period•3 yearsGrant element•29.1745%Interest rate (t₀)•5%Interest type•Fixed Interest RateMaturity•18 years

Narrative

Full Description

Project narrative

In 2001, the Chinese Government and the Government of Pakistan signed an agreement to supply 69 locomotives and 175 passenger coaches worth $100 million to Pakistan for the modernization of its railway system. Under the terms of the agreement, China Eximbank agreed to provide export seller’s credits to cover 87.5% of the financial requirements of the supplier credits that two Chinese firms would offer to Pakistan Railways (PR). The remaining 12.5% would be arranged by Pakistan Railways. The terms of the lending package were as follows: 18 year maturity, 3 year grace period, and an interest rate of approximately 5%. China National Machinery and Equipment Import and Export Corporation (CMC) would be responsible for exporting the 175 passenger carriages, while Dongfang Electric Corporation (DEC) would be responsible for providing 69 modern locomotive engines worth $100 million within a period of two years. Under the agreement, 15 complete locomotives were to be manufactured in China, while the remaining 54 were to be assembled in Pakistan. China was to provide both spare parts and technology. According to a 2003 China Eximbank Annual Report, China Eximbank agreed to provide an RMB 650 million (roughly the equivalent of $100 million at the conversion rate of the time) seller's credit to China National Machinery and Equipment Import and Export Corporation in March 2003. Then, in July 2013, China Eximbank signed a similar agreement with Donfang Electric Corporation for two seller's credits (one worth RMB 680 million and another worth $4.6 million) to support the latter's export of 69 locomotives to Pakistan Railway. Record ID#35120 captures the seller credit from China National Machinery and Equipment Import and Export Corporation (CMC) for the acquisition of 175 railway carriages. Record ID#56551 and ID#56552 capture the China Eximbank seller’s credits that were issued to Dongfang Electric Corporation (DEC)

Staff comments

1. Note that China Eximbank offers export seller’s credits to Chinese companies that are implementing overseas projects. These companies may, in turn, use the proceeds of an export seller's credit to make equity investments or provide loans to the host government or other entities in the host country. In this case, China Eximbank provided an RMB 650 million export seller's credit to CMC, and CMC then used the proceeds of the export seller's credit to lend to Pakistan Railways.