Project ID: 39644

China Eximbank provides $267.2 million preferential buyer's credit for 500 kV North-South Power Transmission Line Project (Linked to Project ID#39984, #70910)

Commitment amount

$ 542976319.0222485

Adjusted commitment amount

$ 542976319.02

Constant 2021 USD

Summary

Funding agency [Type]

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

Recipient

Tajikistan

Sector

Energy (Code: 230)

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

2006-12-21

Actual start

2006-09-16

Actual complete

2009-11-29

Geography

Description

In March 2006, the Government of Tajikistan and the Export-Import Bank of China signed an MoU for various projects proposed by the Government of Tajikistan. Then, on December 21, 2006, the Export-Import Bank of China signed a $267,219,451 preferential buyer’s credit (PBC) agreement with the Ministry of Finance of the Republic of Tajikistan for the 500 kV North-South Power Transmission Line Project. The loan carried the following borrowing terms: a maturity period of 20 years, a grace period of 5 to 7 years, and an interest rate of 2%. The Government of Tajikistan used the proceeds of the PBC to on-lend (through subsidiary loan agreement (No. BLA06015, #6015) to Open Joint Stock Holding Company (OHSHC) “Barqi Tojik” -- a state-owned enterprise in Tajikistan responsible for the generation, transmission, and distribution of electricity and thermal energy -- at a 3% interest rate between December 21, 2006 and June 21, 2026. OHSHC “Barqi Tojik” was expected to use the loan proceeds to finance 95% of the cost of a $281.3 million commercial contract with TBEA Co., Ltd. The loan's amount outstanding was TJS 2,104,674,000 as of December 31, 2016, TJS 2,356,608,000 as of December 31, 2017, TJS 2,519,773,000 as of December 31, 2018, TJS 2,588,608,000 as of December 31, 2019, and TJS 2,975,163,000 as of December 31, 2020. The purpose of the project was to construct a 500 kV electricity transmission line that would connect the northern Sughd region to the national grid. The project also expected to facilitate the effective dispatching of electricity between Dushanbe and Khujand, completely solve the problem of power shortage in the south during the dry season in winter, build a transmission channel for the implementation of the Tajik Hydropower Strategy, improve the safety, stability, and reliability of the power grid, and reduce the loss of electricity through transmission from 14% to 3.2%. TBEA Co., Ltd. was the contractor responsible for project implementation. Construction began on September 16, 2006 and the North-South transmission line has been operational since November 29, 2009. Construction of the 325 km, 500 kV south–north power transmission line reportedly enabled Tajikistan to become independent of the Uzbek power transmission network and to distribute electricity throughout the country. There are some indications that the China Eximbank loan for the 500 kV North-South Power Transmission Line Project may have underperformed vis-a-vis the original expectations of the lender. According to a 2021 IMF report, ‘[OHSHC “Barqi Tojik”] has significant arrears to the government on [foreign exchange] denominated loans. The government on-lends concessional [foreign exchange] loans […] from multilateral and bilateral agencies to [OHSHC “Barqi Tojik”] on non-concessional terms. These loans are denominated in [foreign exchange] and are intended to develop the energy infrastructure. However, these debts are not serviced fully, resulting in [foreign exchange] arrears to the government.’ A 2021 report by the International Energy Agency (IEA) elaborated on this point, explaining that ‘[a] high rate of uncollected payments for electricity use due to illegal connections, power theft and outdated metering infrastructure contribute to the worsening financial health of Barki Tojik.’ Then, in March 2023, the IMF published a report, which noted that ‘[I]n 2021 the SOE sector […] kept accumulating debt service losses, where within a year the amount of debt overdue payments […] increased from TJS 14 billion to TJS 17 billion (17.1 percent of GDP). Some 93 percent of accumulated overdue debt belongs to [OHSHC “Barqi Tojik”].’

Additional details

1. The Russian project title is Строительство ЛЭП 500 кВ “Юг-Север”. The Chinese project title is 塔吉克斯坦南北220—500kV输变电成套工程. 2. China Eximbank claims that this project was financed by preferential buyer's credit in the '重大项目 Major Projects' source. 3. This project is linked to Project ID#70910, which captures a $51 million financial commitment from China Eximbank in 2009 for both the 500 kV North-South Power Transmission Line project and a 220 kV Lolazor-Khatlon Transmission Line Project. The original China Eximbank financial commitment for the 220 kV project in 2006 is captured via Project ID#39984.

Number of official sources

31

Number of total sources

40

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Details

Cofinanced

No

Direct receiving agencies [Type]

Tajikistan Ministry of Finance [Government Agency]

Indirect receiving agencies [Type]

Open Joint Stock Holding Company (OHSHC) “Barqi Tojik” [State-owned Company]

Implementing agencies [Type]

TBEA Co., Ltd. [Private Sector]

Open Joint Stock Holding Company (OHSHC) “Barqi Tojik” [State-owned Company]

Tajikistan Ministry of Finance [Government Agency]

Loan Details

Maturity

20 years

Interest rate

2.0%

Grace period

5 years

Grant element (OECD Grant-Equiv)

48.97%

Bilateral loan

Export buyer's credit

Investment project loan

Preferential Buyer's Credit