Chinese banks pledge loans for Bangkok–Nong Khai High-Speed Railway Construction Project (Linked to Record ID#34309)

Project narrative

In January 2015, the Chinese Government announced plans to provide loans to the Government Thailand for construction of the China-Thailand Railway, stretching approximately 800 km from Bangkok to Nong Kai. However, there is no evidence a loan contract was ever formally signed. This follows the beginning of formal discussions for the railway in 2013 and the signing of a Memorandum of Understanding (MoU) signed in October 2013, which stated that Chinese rail constructors were to provide equipment for the project while Thailand was to pay in part or totally in barter of rice and rubber. The "rice for rails" agreements to help pay for the Bangkok–Nong Khai High-Speed Railway were cancelled and re-pledged a number of times under different terms. However, there is no evidence a formal commitment of financing ever emerged from these MoUs. The pledged rice-backed loan(s) are captured in AidData Record ID#34309. In addition to the 'rice for rails' agreements captured in ID#34309, several other loans for the project were pledged or in discussion by Chinese official financiers, but similarly have not been formally committed. These include a 100 billion Baht loan through the Bank of China at an interest rate of 3% and a repayment period of 20 years, and a 2 billion Baht loan through an unnamed bank at an interest rate of 2.9% and a repayment period of 2.9% in January 2015. In 2016, the Chinese and Thai governments continued negotiations for a loan that would support the China-Thailand Railway stretching approximately 800 km from Bangkok to Nong Kai. The loan's expected borrowing terms were 2.5 percent interest 5-year grace period 15-year term. Then, on March 23, 2016, Thailand’s Prime Minister announced that the project would still go ahead but it would be financed entirely by the Thai Government. Then, in 2017, the Government of Thailand proposed again to borrow funds to cover about 25 percent of the total project cost but it sought a 2% interest rate rather than the earlier 2.5% interest rate. The estimated cost of this project in 2014 was $10.6 billion, which puts the value of the estimated loan at $2.5 billion. The identity of the lending institution is unknown. As of 2019, the Thai Government was still considering Chinese Government funding for the project, including from China Eximbank, but clarified via its Public Debt Management Office that no loan contract had been signed. As of 2024, no additional evidence has been found that loans from Chinese official sources were contracted for the project.