China Eximbank provides $296 million USD export buyer’s credit facility for the Route 32 Renovation Project (Linked to Project ID#39847)

On June 3, 2013, the Export-Import Bank of China and the Government of Costa Rica, the recipient of the financing, signed two financing agreements, totaling $396 million USD, for the Rehabilitation and Extension of National Route N° 32 Cross Section Route 4-Limón: a RMB 628,000,000 government concessional loan (GCL) and a $296,000,000 USD export buyer’s credit loan. The Costa Rican Government approved these financing agreements on March 10, 2015 through Law N° 9293. On June 3, 2013, Costa Rica's National Road Council [Consejo Nacional de Vialidad] (CONAVI) and China Harbour Engineering Company Ltd. (CHEC) formalized a commercial contract for the project implementation worth $465,593,387.06 USD. The two credit facilities from China Eximbank covered about 85% of the total cost of the project, while the Government of Costa Rica covered the remaining funding. The Commercial Contract is referred to as CONAVI-CHEC-001. The first agreement extends an export buyer's credit (Crédito de Comprador de Exportación) facility denominated in USD, with a value of $296 million USD (captured by this project). The contract for this export credit facility is referred to by the Government of Costa Rica as the 'Contrato de Crédito de Comprador de Exportación 1420202052013211015'. This facility carries the following terms: an interest rate of 4%, a maturity of 20 years, a 5 year grace period, a 0.25% commitment fee, and a 0.25% management fee. The borrower is responsible for making all payments to Account No. 778407900258 of the Business Department, Bank of China, Head Office (Swift Code: BKCHCNBJBKD) for receipt by the Export-Import Bank of China, or any other account designated by the lender (China Eximbank) at the time of receipt of payments. The lender will need to open and maintain in their books a loan account titled 'el Gobierno de la República de Costa Rica representado por el Ministerio de Hacienda (nombre del Prestatario) Cuenta en Diseño, Rehabilitación y Extensión del Proyecto de la Ruta Nacional No.32 (nombre del Proyecto)'.The second financing agreement is a government concessional loan (GCL) worth RMB 628 million (see linked project ID #39847). The contract for this preferential loan is referred to by the Government of Costa Rica as the 'Contrato de Préstamo Concesional del Gobierno de China GCL NO. (2013) 30 TOTAL NO. (475)'. The loan identification number is 1420203052013111013. This facility carries the following terms: an interest rate of 2%, a maturity of 20 years, a 5 year grace period, a 0.25% commitment fee, and a 0.25% management fee. The borrower (the Government of Costa Rica, represented by the Ministry of Finance) must also pay RMB 1,570,000 within 30 days of the agreement going into effect and before receiving the first disbursement from the facility. The borrower is responsible for making all payments to Account No. 778407900258 of the Commerce Department, Bank of China, Head Office (Swift Code: BKCHCNBJBKD) for receipt by the Export-Import Bank of China, or any other account designated by the lender (China Eximbank) at the time of receipt of payments. The lender will need to open and maintain in their books a loan account titled 'el Gobierno de la República de Costa Rica, representado por el Ministro de Hacienda para el Proyecto de Diseño, Rehabilitación y Extensión de la Ruta Nacional no. 32 (nombre del Proyecto)'. The purpose of this project is to expand a 107-kilometer section of National Route 32 from two to four lanes. This road section begins at the Route 4 junction at Frío river and extends to Puerto Limón’s district center. National Route 32 connects San José with the port of Limón. 80% of Costa Rican exports and imports go through the ports of Moín and Limón, as it is the main connection with the ports of the eastern United States, Europe, and South America. CONAVI issued an order to CHEC to commence work on November 20, 2017. The project was originally expected to take 42 months from the start date. However, it has faced a variety of delays related to land expropriation, tree cutting and clearing activities, environmental challenges, relocation of utilities, archaeological studies at five locations, and also cultural and language barriers. The initial planned completion date was October 4, 2020. However, according to Service order (O.S.-7) issued by CONAVI to CHEC on January 6, 2020, indicating that the new deadline for completion of the project was March 27, 2021. Another service order (O.S.-11) issued by CONAVI on February 25 2021, indicated that the new deadline for completion of the project was May 22, 2022. As of March 2019, the project had achieved a 9% completion rate.

Additional details

1. The China-Latin America Finance Database, which is co-produced by the Inter-American Dialogue and Boston University’s Global Development Policy Center, characterizes this project as being supported by a single $395 million USD loan from the ‘Chinese government’ and ‘Ex-Im Bank’. However, AidData captures the project as being supported by two separate China Eximbank loans: an RMB 628,000,000 government concessional loan (GCL) and a $296,000,000 USD buyer’s credit loan. Each China Eximbank loan agreement is available in its entirety via https://www.masterlex.com/ResumenesDiarios/Gaceta/2013/Noviembre/ALCA127_01_11_2013.pdf.2. Costa Rican Law N° 9293, which ratified the two loan agreements, refers to the project as 'proyecto rehabilitación y extensión de la ruta nacional N° 32 sección cruce ruta 4-Limón' and 'Proyecto de Diseño, Rehabilitación y Ampliación de la Ruta Nacional No.32’.3. There are several web resources for this project. There is a section of the CONAVI website dedicated to this project, including financial and implementation details: https://conavi.go.cr/ruta-32. There is also a website powered by CONAVI dedicated to this project, including financial and implementation details: https://www.ruta32.cr/. Lastly, there is a YouTube channel exclusively for this road project (Channel name: Ruta 32 Costa Rica): https://www.youtube.com/channel/UCpFEoi7YAvWiMKGhbKMS2tA.

Number of official sources

20

Number of unofficial sources

11