Project ID: 35120

China provides 650 million RMB in supplier's credit for China National Machinery Co to export 175 railway coaches to Pakistan (Linked to projects #56551 and #56552)

Commitment amount

$ 171395394.9

Constant 2017 USD

Summary

Funding agency [Type]

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

Recipient

Pakistan

Sector

Transport and storage (Code: 210)

Flow type

Supplier's Credit/Export Seller'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

2001

Description

In 2001, China and Pakistan signed an agreement to supply 69 locomotives and 175 passenger coaches worth 100 million USD to Pakistan to modernize its railway system. Under the contract, the Exim Bank of China will meet 87.5 per cent of the financial requirements of the export supplier credit basis, while the rest will be arranged by Pakistan Railways. The repayment period for the credit is 15 years. The grace period will be three years and the interest rate will be about five per cent. China National Machinery and Equipment Import and Export Corporation will export the 175 passenger carriages. Another Chinese Company, Dongfang Electric Corporation (DEC) will provide altogether 69 modern locomotive engines worth 100 million USD to Pakistan within a period of two years. Under the agreement, 15 complete locomotives are to be manufactured in China, while the rest of 54 will be assembled in Pakistan. China will provide both spare parts and technology. According to the annual report by EXIM Bank of China of 2003, in March 2003, China Eximbank agreed to provide 650 million RMB (roughly the equivalent of USD100 million at the conversion rate of the time) in supplier's credits for China National Machinery, and later in July, the bank signed a similar deal with Donfang Electric Corporation for two lines of supplier's credit, one of CNY680 million and the other of USD4.6 million, to support the latter's export of 69 locomotives. This project captures the supplier credit from China National Machinery and Equipment Import and Export Corporation (CMC) for the acquisition of 175 railway carriages. For details of the other project, see projects #56551 and #56552. These records are linked together because they were signed and implemented simultaneously.

Additional details

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.

Number of official sources

2

Number of unofficial sources

14

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Details

Cofinanced

No

Receiving agencies [Type]

Pakistan Railways [State-owned Company]; China National Machinery and Equipment Import & Export Corporation [State-owned Company]

Implementing agencies [Type]

Pakistan Railways [State-owned Company]; China National Machinery and Equipment Import & Export Corporation [State-owned Company]

Loan type

Concessional

Maturity

15 years

Interest rate

5.0%

Grace period

3 years

Grant element

26.8491055%

Gurarantee provided

No

Insurance provided

No