Project ID: 38995

China Eximbank provides $22.26 million preferential buyer's credit for Gwadar Port Channel Deepening Project (Linked to Project ID#35124, #38996, #72688, #72689, #92475)

Commitment amount

$ 45231186.637814224

Adjusted commitment amount

$ 45231186.64

Constant 2021 USD

Summary

Funding agency [Type]

Export-Import Bank of China (China Eximbank) [State-owned Policy Bank]

Recipient

Pakistan

Sector

Transport and storage (Code: 210)

Flow type

Loan

Level of public liability

Central government debt

Financial distress

Yes

Infrastructure

Yes

Category

Intent

Mixed (The next section lists the possible statuses.)

Commercial

Development

Representational

Mixed

Financial Flow Classification

OOF-like (The next section lists the possible statuses.)

Official Development Assistance

Other Official Flows

Vague (Official Finance)

Flows categorized based on OECD-DAC guidelines

Project lifecycle

Status

Completion (The next section lists the possible statuses.)

Pledge

Commitment

Implementation

Completion

Suspended

Cancelled

Milestones

Commitment

2006-03-24

Actual start

2002-03-22

Planned complete

2005-03-01

Actual complete

2007-02-01

NOTE: Red circles denote delays between planned and actual dates

Geography

Description

During the visit of Chinese Prime Minister Zhu Rongji to Pakistan in May 2001, the Gwadar deep water port was a key item of discussion. Pakistani Finance Minister Shaukat Aziz said that the Chinese Government has agreed to help fund the construction of phase one of the $250 million Gwadar Deep Water Port Project. Then, on August 10, 2001, the Chinese Government and the Government of Pakistan signed a financing framework agreement for development of Phase 1 of the Gwadar Deep Water Port Project. The Chinese Government ultimately signed six different financial agreements for Phase 1. (1) In 2001, the China Ministry of Commerce signed a $31 million grant agreement (captured via Project ID#35124) (2) In 2001, the China Ministry of Commerce signed another $31 million grant agreement (captured via Project ID#72688) (3) In 2001, the China Ministry of Commerce signed a $18 million grant agreement (captured via Project ID#72689) (4) On December 26, 2002, China Eximbank signed an RMB 481,400,000 government concessional loan (GCL) agreement [CHINA EXIMBANK GCL NO. (2002) 3 TOTAL NO. (95)]. It carries a 2% interest rate but the borrowing terms are unknown (captured via Project ID#38996) (5) In 2003, China Eximbank signed an RMB 502,690,200 government concessional loan (GCL) agreement [CHINA EXIMBANK GCL NO. (2003) 3 TOTAL NO. (95)]. The borrowing terms are unknown (captured via Project ID #92475) (6) On March 24, 2006, China Eximbank and the Government of Pakistan signed a $22.26 million preferential buyer's credit (PBC) agreement [BLA05147] for the Gwadar Port Channel Deepening Project (also known as the Additional Dredging Works of Gwadar Deep Water Port Phase 1 Project). It carries a 3% interest rate its proceeds were used to finance a commercial contract that was signed on August 10, 2005 (captured via Project ID#38995). Phase 1 involved the dredging of the Gwadar port to 14.5 meters. The objective of the project was to enable 50,000 DWT vessels to use the port. The Gwadar Port Channel Deepening Project was an extension to Phase 1 of the Gwadar Deep Water Port Project, which comprised three multi-purposes berths of 602-meter total length and also accommodated roll-on roll-off vessels, a 100-meter service berth, 4.25-kilometer approach channel dredged to 11.5 meter-12.5 meter and demarcated with buoys and turning lights. China Harbour Engineering Company Ltd (CHEC) -- a subsidiary of China Communications Construction Company Limited -- was the contractor responsible for project implementation. On March 22, 2002, a groundbreaking ceremony took place. At that time, the project was expected to reach completion by March 2005. The channel was successfully dredged and deepened to 14.5 meters in February 2007. Prime Minister Shaukat Aziz inaugurated the deep sea port on March 20, 2007. Gwadar Port was then taken over by China Overseas Ports Holding Company Limited (COPHC) on May 16, 2013 — for 40 years. Gwadar Port, located about 350 kilometers west of Karachi on the Arabian Sea coast, is now considered the nearest warm water port for the Central Asian states for their trade with Europe, East Asia, and the Americas. There are some indications that the China Eximbank preferential buyer’s credit for the Gwadar Port Channel Deepening 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 preferential buyer’s credit agreement for the Gwadar Port Channel Deepening Project. Then, on November 19, 2020, China Eximbank and the Government of Pakistan signed another debt suspension agreement [No. DSSI2021PHASE1-032]. 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 preferential buyer’s credit agreement for the Gwadar Port Channel Deepening 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 preferential buyer’s credit agreement for the Gwadar Port Channel Deepening 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#95580. The debt service suspension (rescheduling) from July 2021-December 2021 is captured via Project ID#96253.

Additional details

1. The debt suspension agreement [No. DSSI2021PHASE1-032] can be accessed in it entirety via https://www.dropbox.com/s/urpr6d8c5po2eng/5.%20Debt%20Suspension%20Agreement%20for%20PBC%20Additional%20Dredging%20Works%20of%20Gwadar.pdf?dl=0.

Number of official sources

10

Number of total sources

30

Download the dataset

Details

Cofinanced

No

Direct receiving agencies [Type]

Government of Pakistan [Government Agency]

Implementing agencies [Type]

China Harbour Engineering Co., Ltd. [State-owned Company]

Loan Details

Interest rate

3.0%

Bilateral loan

Export buyer's credit

Investment project loan

Preferential Buyer's Credit