Project ID: 40

ICBC provides $825 million export credit facility for 600MW Morupule B Power Plant Construction Project (Linked to Project ID#98173)

Commitment amount

$ 1239231226.5334415

Adjusted commitment amount

$ 1239231226.53

Constant 2021 USD


Funding agency [Type]

Industrial and Commercial Bank of China (ICBC) [State-owned Commercial Bank]




Energy (Code: 230)

Flow type


Level of public liability

Central government-guaranteed debt





Mixed (The next section lists the possible statuses.)





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


Completion (The next section lists the possible statuses.)










Planned start


Actual start


Planned complete


Actual complete


NOTE: Red circles denote delays between planned and actual dates


On June 15, 2009, the Industrial and Commercial Bank of China (ICBC) and Botswana Power Corporation (BPC) — a state-owned power company in Botswana — signed a $825,048,559.40 export credit facility agreement for the 600MW Morupule B Power Plant Construction Project. The loan carries the following borrowing terms: a 20-year maturity, a 3.5-year grace period, and an annual interest rate of 6-month LIBOR plus a 1.6% margin. The borrower was expected to repay the loan between December 2012 to June 2029. It was also expected to use the loan proceeds to finance 85% of the cost of a $970 million commercial (EPC) contract with China National Electric Equipment Corporation (CNEEC), which was signed in November 2008. Sinosure and World Bank insured the buyer's credit loan (export credit facility) and the Government of Botswana’s Ministry of Finance also provided a sovereign guarantee. As an additional credit enhancement, the borrower agreed to maintain a minimum cash balance of $33 million (equivalent to one principal and interest repayment/installment) in a Debt Service Reserve Account (DSRA). The Government of Republic of Botswana funded the DSRA with P300 million while Botswana Power Corporation paid the balance of P48 million. The total cost of the Morupule B Power Project was $1.6623 billion. It was financed according to a 70:30 debt-to-equity ratio. ICBC contributed $825 million of debt financing, while the World Bank, and the African Development Bank contributed $136.4 million and $202.5 million of debt financing, respectively. The 30% equity contribution ($498.4 million) came from Botswana Power Corporation and the Government of Botswana. In addition to the long-term (20-year) export credit facility, ICBC provided a short-term $140 million equity bridge loan to the project sponsor (BPC) to ensure that it could meet its equity contribution requirement. The borrowing terms that applied to the equity bridge loan are unknown. However, it is known that the loan was guaranteed by Standard Bank. Standard Bank also provided 20-year currency and interest rate hedging for the export credit facility – a cross-currency swap designed to convert US dollar funding into fixed rate synthetic Botswana Pula, thus minimizing BPC's exposure to adverse movements in foreign exchange and interest rates, and enabling the sponsor to align loan currency with the currency of its revenue stream for the full repayment period. The project involved the construction of a 600MW coal-fired power plant consisting of 4x150MW units — that uses circulating fluidized bed technology — for domestic power generation purpose. The 600MW Morupule B power plant is located in the township of Palapye, northeast of Gaborone, and it geographically adjacent to the existing 132MW Morupule A power plant. It sources feedstock from the same mine as the existing 132MW Morupule A plant. The project has three main components: the Morupule B Power Station; a 400kV Morupule B–Phokoje transmission system and associated sub-stations linking the plant to the BPC grid; and a 35-borehole well-field and associated water reticulation system. The coal is sourced from the Morupule coal mine, which is the only major operating coal mine in Botswana. The Morupule coal mine is operated by Morupule Colliery Limited, a subsidiary of Debswana Diamond Company. China National Electric Equipment Corporation (CNEEC) was the general EPC contractor responsible for implementation. Shenyang Blower Works (Group) Co., Ltd (SBW) also supported the project as a subcontractor. Site and contractor’s camp accommodation facilities as well as bush clearing activities started in early June 2009 and were effectively completed by the end of July 2009, which facilitated CNEEC-SBW to undertake Topographical Survey and Geotechnical Investigation to confirm the design parameters associated with the in-situ ground geological data at the site area. The erection of the contractor’s camp facilities started in November 2009. The camp had the capacity to accommodate approximately 1,500 staff. The project's official EPC contract commencement date was April 29, 2009. However, the project's groundbreaking ceremony did not take place until February 19, 2010. It was originally envisaged that the power plant plant would become operational by October 2012. However, the project experienced significant delays and CNEEC did not hand over the four power generation units to the BPC until May 4, 2014. Then, in October 2014, three of the four power generation units broke down, and the Government of Botswana had needed to consider importing energy from South Africa. The power plant was originally expected to operate at the annual capacity factor of about 80 percent, with annual gross generation of about 4,200 gigawatt-hour (GWh). However, the plant’s capacity factor was closer to 50 percent, reflecting poor availability and unreliability of the units due to forced outages. Units 1-4 had the capacity to produce 600MW, but they only operated at 21 percent capacity producing only 130MW. According to BPC's 2019 Annual Report, BPC signed a Defects Remediation Agreement with CNEEC to remedy the plant's defects, which was expected to result in the remediation of all plant defects in a phased manner between 2019 and January 2023. Efforts were also undertaken to expand the plant’s power generation capacity to 900MW after a tender for construction of two additional units (Unit 5 and 6) was awarded to a joint venture between Japanese Marubeni and South Korea’s Posco Energy.

Additional details

1. This project is also known as 4x150 MW Morupule B Power Station Expansion Project or the 600MW Morupule B Coal Power Station Project. The Chinese project title is 博茨瓦纳莫鲁卜勒B燃煤电站项目 or 博Morupule电站建设项目. 2. The database of Chinese loan commitments that SAIS-CARI released in July 2020 does not record the interest rate that applied to the loan. AidData records the interest rate (6-month LIBOR plus a 1.6% margin) that is reported by the borrower (Botswana Power Corporation) and the Government of Botswana. The effective interest rate that applies to this loan (2.78%) was calculated by taking the average 6-month LIBOR rate during the month (June 2009) when the loan agreement was finalized (1.18%) and adding a 1.6% margin. 3. In the event of use of Debt Service Reserve Account to settle a given loan installment, the borrower (Botswana Power Corporation) is required to replenish the account within 2 working days. 4. A December 15, 2009 cooperation agreement between Sinosure and the IBRD can be accessed in its entirety via 5. A useful overview of the partial credit guarantee from the IBRD can be found at and 6. The $825.048 million long-term debt was guaranteed by Sinosure (commercial and political risk insurance) for the first 15 years, followed by a partial guarantee from the IBRD/World Bank for the remaining 5 years. Approvals from the World Bank and Sinosure were secured in October 2009. 7. Delphos International served as a financial adviser. Minchin & Kelly served as legal counsel to the project sponsor. Clifford Chance and Armstrongs served as legal counsel to the lender. 8. One source ( claims that the borrower paid a 'liquidity premium of 3% for debt provider ICBC'. More research is needed to determine if this premium refers to the Sinosure insurance premium.

Number of official sources


Number of total sources


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Cofinancing agencies [Type]

World Bank [Intergovernmental Organization]

African Development Bank (AfDB) (ADB) (BAD) [Intergovernmental Organization]

Standard Bank [Private Sector]

Direct receiving agencies [Type]

Botswana Power Corporation [State-owned Company]

Implementing agencies [Type]

Shenyang Boiler Works [Private Sector]

China National Electric Engineering Co., Ltd. (CNEEC) [State-owned Company]

Botswana Power Corporation [State-owned Company]

Shenyang Blower Works (Group) Co., Ltd [State-owned Company]

Guarantee provider [Type]

Ministry of Finance of Botswana [Government Agency]

Insurance provider [Type]

World Bank [Intergovernmental Organization]

China Export & Credit Insurance Corporation (Sinosure) [State-owned Company]

Collateral provider [Type]

Government of Botswana [Government Agency]

Botswana Power Corporation [State-owned Company]


$33 million cash deposit in a Debt Service Reserve Account (DSRA)

Loan Details


20 years

Interest rate


Grace period

4 years

Grant element (OECD Grant-Equiv)


Bilateral loan

Export buyer's credit

Investment project loan