Narrative
Full Description
Project narrative
On August 7, 2004, the Chinese Government and the Government of the Republic of Vanuatu signed an Economic and Technical Cooperation Agreement (ETCA), which committed an RMB 20 million (VUV 214 million) interest-free loan for an unspecified purpose. Then, on April 7, 2006, the Chinese Government and the Government of the Republic of Vanuatu signed letters of exchange and agreed to use the proceeds of the interest-free loan for the Melanesian Spearhead Group Headquarters Building Construction Project. The loan’s repayment period was scheduled to begin in December 2015. The purpose of this project was to construct a building to house the Melanesian Spearhead Group (MSG) secretariat in the city of Port Vila on behalf of the MSG member countries. Ningbo Construction Group was the contractor responsible for implementation. Construction began on January 22, 2007 and ended on September 20, 2007. A formal project handover ceremony was held on October 31, 2007. The building was officially inaugurated in May 2008. Then, on November 9, 2018, the Chinese Government and the Government of the Republic of Vanuatu signed a partial debt exemption protocol, which relieved the Government of the Republic of Vanuatu of its loan repayment obligations under the August 7, 2004 ETCA (captured in Record ID#62571). According to reporting in the Vanuatu Daily Post, officials from Vanuatu’s Ministry of Finance and Economic Management believed that the Melanesian Spearhead Group Headquarters Building Construction Project was financed with a grant that did not need to be repaid.
Staff comments
1. The Chinese project title is 美拉尼西亚先锋集团办公楼 or 美拉尼西亚先锋集团（MSG）秘书处办公楼项目. 2. There are some indications that Ningbo Construction Group may have also used some of the loan proceeds from the August 7, 2004 ETCA to build housing for the Chinese medical team in Vanuatu (See Record ID#39258). 3. This record has been marked as having evidence of financial distress because it was subject to debt forgiveness captured in record #62571. 4. The November 9, 2018 debt exemption protocol can be accessed in its entirety via https://www.dropbox.com/sh/yslxk77s3e8ewsi/AABkl3dmQoUZhX6UEFyBWIZ-a?dl=0&preview=China_Protocol+on+remitting+partial+debt_09112018.pdf. 5. Since loan terms for the interest-free loan are unavailable, AidData has set maturity period to 20 years by default and grace period to 10 years by default per China's Foreign Assistance White Paper (http://www.cidca.gov.cn/2018-08/06/c_129925064_3.htm) which states that the maturity period of interest-free loans is 20 years, with a drawdown period of 5 years, grace period of 5 years, and repayment over 10 years. AidData treats the drawdown period as providing 5 years of additional grace.