China Development Bank provides Costa Rica with $900 million loan for oil refinery expansion (linked to Record ID#37285) (Suspended)

Project narrative

On December 5, 2011, China Development Bank offered Costa Rica a $900 million loan for an oil refinery in Limón, Costa Rica. The project was contracted to China National Petroleum Corporation. In 2008, Costa Rica’s state-owned oil company, Refinadora Costarricense de Petróleo S.A. (RECOPE), and China’s state-owned oil company, CNPC International, Ltd., created a joint venture company called the Chinese-Costa Rican Reconstruction Corporation (SORESCO). SORESCO is the recipient agency in this transaction. The purposes of the joint venture were to extend and modernize the Moín Refinery, establish a Costa Rica-China Laboratory & Training Center for Petroleum and Petrochemical Technology, and carry out a feasibility study of the Export Refinery. For the 2011 loan, CDB provided SORESCO with a term sheet, indicating that the likely terms for the loan would be for USD $150 million with a 15 year maturity period, a three year grace period, and a three month LIBOR plus margin. These details were not solidified, however. The refinery project was suspended in 2013 after a Comptroller General’s Office investigation determined that a conflict of interest in the environmental impact study violated the terms of the agreement. In January 2015, CNPC engaged in talks with Refinadora Costarricense de Petróleo to re-institute the project, and a feasibility study was initiated. However, the two sides failed to reach an agreement, and RECOPE released a statement on April 14th, 2016, announcing both its withdrawal from the SORESCO partnership and the Moín project's termination.