China Eximbank provides $114.28 million buyer’s credit loan for Procurement of 202 Passenger Carriages Project (Linked to Project ID#35901)

On December 14, 2009, China Eximbank and the Government of Pakistan’s Ministry of Railways signed a $114,284,494 buyer’s credit loan (BCL) agreement [ID# BLA0928] for the Procurement of 202 Passenger Carriages Project. Pakistan’s Ministry of Finance issued a repayment guarantee in support of the loan. The loan carried an interest rate of LIBOR plus a 2.2% margin. However, its maturity length and grace period are unknown. The proceeds of the loan were to be used by the borrower to finance a commercial contract between Pakistan Railways and China Machinery Import and Export Corporation (CMC). The loan had achieved a disbursement rate of 52.4% ($59.94 million out of $114.28 million) as of March 31, 2013. It had achieved a disbursement rate of 99.8% ($114.08 million out of $114.28 million) as of September 30, 2014. The purpose of the project was to facilitate the acquisition of 202 railway coaches. CMC was the contractor responsible for project implementation. On January 1, 2012, the first shipment of 28 railway passenger cars from Dalian arrived in Pakistan. Then, in April 2013, CMC exported the sixth batch of 202 locomotives to Pakistan. The last batch of locomotives was received on May 6, 2015. There are some indications that the China Eximbank buyer’s credit loan for the Procurement of 202 Passenger Carriages 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 buyer’s credit loan agreement for the Procurement of 202 Passenger Carriages Project. Then, on November 19, 2020, China Eximbank and the Government of Pakistan signed another debt suspension agreement [No. DSSI2021PHASE1-037]. 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 buyer’s credit loan agreement for the Procurement of 202 Passenger Carriages 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 buyer’s credit loan agreement for the Procurement of 202 Passenger Carriages 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#96252. 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 “Procurement of 202 Passenger Carriages” Project or the Project of “Procurement of 202 Passenger Carriages”. 2. This project is linked to Project ID#35901, which is a cancelled BCL for locomotives that was also signed on December 14, 2009. 3. AidData has estimated the all-in interest rate by adding 2.2% to average 6-month LIBOR in December 2009 (1.1%). 4. Some sources identify Pakistan Railways as the borrowing institution. This issue warrants further investigation. 5. The debt suspension agreement [No. DSSI2021PHASE1-037] can be accessed in it entirety via https://www.dropbox.com/s/hivt8yfx9t3gs3y/10.%20Debt%20Suspension%20Agreement%20for%20BC%20202.pdf?dl=0

Number of official sources

9

Number of total sources

18