China Eximbank provides export seller's credit for 96MW Jinnah Hydropower Station Project

In November 2003, Pakistan's Water and Power Development Authority (WAPDA) signed a $128 million EPC contract agreement with Dongfang Electric Corporation (DEC) for the construction of 96MW Jinnah Hydropower Project. Then, on November 3, 2003, China Eximbank provided an export seller's credit to DEC to cover 85% of the cost of the EPC contract ($108.8 million) with the Pakistan Water & Power Development Authority. The remaining 15% of the project cost was to be arranged by WAPDA as advance payment to the contractor. DEC then used the proceeds of the export seller's credit to provide a $123.097 million supplier's credit (loan) to the Government of Pakistan on the following borrowing terms: a 14-year maturity, a 4-year grace period, and a 5% interest rate. The loan was backed by a sovereign guarantee and secured by (i.e. collateralized against) a standby letter of credit to back issuance of 20 promissory notes issued at the time of commencement of the project in 2006. The borrower was responsible for repaying the loan in 20 semi-annual installments starting on August 18, 2010. The loan's amount outstanding was $24,618,000 as of June 30, 2018, $12,308,000 as of June 30, 2019, and $0 as of June 30, 2020. The main components of the project include a headrace tunnel, powerhouse with eight 12-MW low-head pit turbines, a tailrace channel, 132-kilovolt double-circuit transmission line, and 132-kV switchyard. The project is located on the right side of existing Jinnah Barrage, 5 km from Kalabagh town in District Mianwali and 234 km from Islamabad. DEC was the EPC contractor responsible for project implementation. Construction began on February 18, 2006, and the project reached its commercial operation date (COD) on October 9, 2013.

Additional details

1. The Chinese project title is 真纳水电站. 2. 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 a $108.8 million export seller's credit to Dongfang Electric Corporation, and Dongfang Electric Corporation then use the proceeds of the export seller's credit to lend to the Government of Pakistan. 3. The Pakistan Water & Power Development Authority (WAPDA) is a government-owned public utility maintaining power and water in Pakistan, although it does not manage thermal power. WAPDA includes Tarbela and Mangla dams among its resources. Its headquarters are in Lahore. 4. The loan's amounts outstanding are drawn from the audited financial statements of WAPDA (https://web.archive.org/web/20220615174314/https://gmfp.wapda.gov.pk/Reports/FY_2019.pdf and https://web.archive.org/web/20220615174306/https://gmfp.wapda.gov.pk/Reports/FY_2020.pdf).

Number of official sources

9

Number of total sources

16