China Eximbank provides RMB 281 million government concessional loan for Engineering Battalion Machinery Project

Project narrative

On March 16, 2010, China Eximbank and the Government of Bolivia signed an RMB 281,000,000 government concessional loan (GCL) agreement [GCL NO.(2009) 43 TOTAL NO.(294) NO.1290003032010110041] for the Engineering Battalion Machinery Project (or Proyecto de Equipamiento del Batallon de Ingenieria). The GCL carries the following terms: an interest rate of 2%, a grace period of 5 years, and a 21 year maturity. The loan was officially ratified by the Bolivian legislature via Law No. 14 on May 24, 2010. The Tesoro General de la Nación (TGN) provided a loan repayment guarantee. The lender made disbursements worth approximately $44,985,380 between 2010 and 2012 and no additional loan disbursements between 2013 and 2021. The borrower made no principal repayments between 2010 and 2015. However, it paid interest and/or fees worth an unknown amount between 2010 and 2012, $923,974 in 2013, $921,192 in 2014, and $906,542 in 2015. The borrower made loan repayments worth $3,610,019 in 2016 ($2,755,520 in principal and $854,499 in interest/fees), $3,468,305 in 2017 ($2,691,006 in principal and $777,299 in interest/fees), $3,495,231 in 2018 ($2,754,864 in principal and $740,367 in interest/fees), $3,290,985 in 2019 ($2,636,049 in principal and $654,936 in interest/fees), an unknown amount in 2020, $3,375,239 in 2021 ($2,794,553 in principal and $580,686 in interest/fees), $3,219,691 in 2022 ($2,710,847 in principal and $508,844 in interest/fees), and $2,985,968 in 2023 ($2,557,883 in principal and $428,085 in interest/taxes). The loan’s (principal) amount outstanding was $44,985,380 as of December 31, 2012, $46,246,888 as of December 31, 2013, $45,198,237 as of December 31, 2014, $43,198,441 as of December 31, 2015, $37,704,722 as of December 31, 2016, $37,379,667 as of December 31, 2017, $32,859,312 as of December 31, 2018, $29,787,267 as of December 31, 2019, $29,182,075 as of December 31, 2020, $26,954,503 as of December 31, 2021, $22,028,067 as of December 31, 2022, and $19,057,774 as of December 31, 2023. The purpose of the project was to strengthen 6 engineering battalions in 6 departments: Tarija, La Paz (El Alto and Ixiamas), Santa Cruz, Cochabamba (Villa Tunari), Pando (Cobija), and Oruro (Corque). The project also sought to support the Heavy, Light and Miscellaneous Equipment Maintenance Center and the overall goal of building and improving roads. This project will mainly be executed by Bolivia’s Army Construction Company (Empresa de Construcciones del Ejército (ECE). Through this project, the Government of Bolivia bought hundreds of units of various road construction machines and equipment from Xuzhou Construction Machinery Group (XCMG) and the China Ordnance Industries Group Corporation Limited (NORINCO), including 197 truck cranes, rollers, loaders, crawler cranes, concrete pumps, motor graders, excavators, and backhoe loaders. In March 2012, a project handover ceremony took place in El Alto. The ceremony included hundreds of vehicles and machines, the Bolivian military guard of honor, engineer battalion, and other officials. There was subsequent controversy with regards to the project with reports that the machinery was of poor quality or overvalued.