China Eximbank provides RMB 700 million government concessional loan for Baoré Cement Factory Project (Linked to Project ID#396)

In July 2007, China Eximbank and the Government of Chad signed an RMB 700 million ($92,029,990.50) government concessional loan (GCL) agreement for the Baoré Cement Factory Project. This loan carried a 1.5% interest rate and a 5 year grace period, but the maturity length is unknown. The proceeds of the GCL were on-lent to Société National de Ciment Tchad (SONACIM Tchad), a Chadian state-owned company that was established to manage the Baoré Cement Factory. The ultimate borrower (SONACIM Tchad) the use the proceeds of the GCL to finance a commercial contract with China CAMC Engineering Co, Ltd.. The Baoré Cement Factory Project involved the construction of a cement plant with annual production capacity of 200,000 tons as well as a dedicated heavy fuel oil (HFO) power station, mining equipment and access roads. The plant occupies an area of 17 hectares and it is located in the village of Bissi Kéda within Mayo Kebbi West State (approximately 8km from the limestone quarries in Baoaré). Beijing Triumph Materials Engineering Design Co. was the contractor responsible for project design and China CAMC Engineering Co, Ltd. was the contractor responsible for implementation. To control the quality of the cement that is produced, a modern laboratory adjoins the factory; it is used to analyze samples taken at random to verify their compliance with international standards. The project commenced on December 17, 2007 and the factory was officially completed and put into production on February 16, 2012. Chad's President Idriss Deby, Prime Minister Emmanuel Nadingar, and Chinese Ambassador Yang Guangyu attended the opening ceremony for the factory. The region where the cement plant is located has three quarries with 7 million tonnes of limestone. It also abounds in clay, laterite and sand, three raw materials that go into the manufacture of cement. The cement plant reportedly employs 300 Chadian workers and 100 Chinese workers. There are indications that the China Eximbank loan for the Baoré Cement Factory Project financially underperformed vis-a-vis the original expectations of the lender. After a sharp decline in oil prices in 2014-2015, Chad experienced an economic recession and a debt crisis and its government sought to renegotiate the borrowing terms of the China Eximbank loan for the Baoré Cement Factory Project. A rescheduling agreement was finalized in April 2017: China Eximbank agreed to the lengthen the maturity of the loan and reschedule arrears that had accumulated (as captured via Project ID#55744). It appears that China Eximbank did not require the accumulated arrears to be repaid before rescheduling the maturity of the loan.

Additional details

1. The project is referred to as Baoare Cement Factory Project or Bahoré Cement Factory Project. The Chinese project title is 巴阿赫水泥厂 or 乍得巴阿赫水泥厂项目 or 乍得巴阿赫水泥厂项目. 2. In the database of Chinese loan commitments that SAIS-CARI released in July 2020, it identifies the interest rate of the China Eximbank loan as LIBOR plus a 1.5% margin. However, most other sources refer to the interest rate of the government concessional loan (GCL) that supported this project as 1.5%. AidData relies on the 1.5% estimate since China Eximbank is not known to have ever issued a GCL at a floating market interest rate (such as LIBOR). 3. On October 11, 2011, the Government of Chad established a state-owned company — called Société National de Ciment Tchad (SONACIM Tchad) — to manage the Baoré Cement Factory.

Number of official sources

12

Number of total sources

24