China Eximbank provides RMB 136 million government concessional loan for National Broadband Highway Project (Linked to Project ID#96220, 96219)
Commitment amount
$ 25311490.687065735
Adjusted commitment amount
$ 25311490.69
Constant 2021 USD
Summary
Funding agency [Type]
Export-Import Bank of China (China Eximbank) [State-owned Policy Bank]
Recipient
Samoa
Sector
Communications (Code: 220)
Flow type
Loan
Level of public liability
Central government debt
Financial distress
Yes
Infrastructure
Yes
Category
Project lifecycle
Description
In April 2011, the Chinese Government and the Government of Samoa’s signed an MOU for the National Broadband Highway Project. On January 5, 2012, Chinese Ambassador Zhao Weiping and Samoan Prime Minister Tuilaepa signed a preferential loan framework agreement for the National Broadband Highway Project. China Eximbank subsequently approved an RMB 136,000,000 ($20,400,000) government concessional loan for the National Broadband Highway Project, which carries the following borrowing terms: a 2% interest rate, a 20 year maturity, a 5 year grace period, a 0.75% commitment fee, and a 0.1% management fee. The first loan disbursement took place in December 2012. Additional disbursements took place in late 2013 and the first half of 2014. The borrower made no principal repayments between July 1, 2016 and June 30, 2017, principal repayments worth WST 3,371,005 between July 1, 2017 and June 30, 2018, principal repayments worth WST 3,348,484 between July 1, 2018 and June 30, 209, principal repayments worth WST 3,394,994 between July 1, 2019 and June 30, 2020, and no principal repayments between July 1, 2020 and June 30, 2021. The loan's amount outstanding was WST 10,548,189 as of June 30, 2013, WST 50,758,205 as of June 30, 2014, WST 57,699,498 as of June 30, 2015, WST 52,740,947 as of June 30, 2016, WST 49,884,845 as of June 30, 2017, WST 49,506,550 as of June 30, 2018, WST 44,983,111 as of June 30, 2019, WST 41,196,236 as of June 30, 2020 and WST 39,708,794 as of June 30, 2021. The purpose of the project was to establish a government intranet and thereby provide national high-speed broadband connections for all government ministries and cooperation, including schools, hospitals, and emergency services. The intranet sought to connect the provinces of Upolu and Savaii with the capital of Apia. The network was expected to rely predominantly on existing Samoa Tel infrastructure, with fiber transmission throughout Upolu and microwave transmission throughout Savaii. The network was designed to provide the government with a means of communicating with the citizens of Samoa using the full suite of voice, image and multimedia services, as well as allowing it to store and exchange information securely. Huawei Technologies Co., Ltd. was the contractor responsible for implementation. The project was officially completed and handed over to the local authorities on June 26, 2014. The project connected 66 ministries, corporations and their centers to a Data Center next to the National Kidney Foundation in the capital city of Apia. According to the Asian Development Bank, the broadband network is underutilized and the government has not allocated an appropriate maintenance budget. There are some indications that the China Eximbank loan for the National Broadband Highway Project has financially underperformed vis-a-vis the original expectations of the lender. In 2020, as part of G20's Debt Service Suspension Initiative (DSSI), China Eximbank and the Government of Samoa signed a debt suspension agreement. Under the terms of the agreement, the lender agreed to suspend principal and interest payments due between May 1, 2020 and December 31, 2020 under multiple loan agreements, including the loan agreement for the National Broadband Highway Project. The total estimated suspension amount is $21,906,085. Then, in 2021, China Eximbank and the Government of Samoa signed another debt suspension agreement. Under the terms of the agreement, the lender agreed to suspend principal and interest payments due in 2021 under multiple loan agreements, including the loan agreement for the National Broadband Highway Project. The total estimated suspension amount was $16,436,000 ($13,506,000 in principal payments and $2,929,000 in interest payments). The 2020 debt rescheduling is captured via Project ID#96220. The 2021 debt rescheduling is captured via Project ID#96219.
Additional details
1. This project is also known as the Samoa National Broadband Highway Project (S.N.B.H.P.), the SNBH Broadband Project. the Huawei Broadband Project, and the PRC Huawei National Broadband Highway Project. The Chinese project title is 萨摩亚国家宽带网项目 or 萨摩亚宽带信息高速公路项目. 2. The China Eximbank loan that supported this project is not included in the Overseas Development Finance Dataset that Boston University’s Global Development Policy Center published in December 2020. 3. The Government of Samoa loan identification number for this project is 2012003. 4. The amounts outstanding and repayments data are drawn from the annual Public Accounts of Samoa’s Ministry of Finance: https://www.dropbox.com/s/mqx2n1f5zvzh1l0/Public-Accounts-2014.pdf?dl=0 and https://www.dropbox.com/s/p93si5mz4lpapns/Public-Accounts-2015.pdf?dl=0 and https://www.dropbox.com/s/fye48g5n4yylqgk/Public-Accounts-2016.pdf?dl=0 and https://www.dropbox.com/s/hm8oorga2sqi9na/Public-Account-FY-2017.pdf?dl=0 and https://www.dropbox.com/s/n6miez702ndycis/Public-Accounts-2018.pdf?dl=0 and https://www.dropbox.com/s/1kh3a47s4i2oh3r/Public-Accounts-2019-.pdf?dl=0 and https://www.dropbox.com/s/3i4r1bd0ctjlumo/Public-Accounts-2020.pdf?dl=0 and https://www.dropbox.com/s/jt0expsqan3uy2n/Public-Accounts-2021.pdf?dl=0
Number of official sources
23
Number of total sources
28
Details
Cofinanced
No
Direct receiving agencies [Type]
Government of Samoa [Government Agency]
Implementing agencies [Type]
Huawei Technologies Co., Ltd. [Private Sector]
Loan Details
Maturity
20 years
Interest rate
2.0%
Grace period
5 years
Grant element (OECD Grant-Equiv)
48.97%