China Eximbank provides $73.6 million loan for Gas Network Modernization Project

In 2007, China Eximbank agreed to loan $73.6 million USD to Uzbekneftegaz (Uzbekistan's state-owned oil and gas company) for the modernization of its gas transportation system. The reported terms of the China Eximbank loan were as follows: 20 year maturity, 5 year grace period, 2% interest rate. The Uzbek Government also provided a sovereign guarantee for the loan. The total cost of the project was $81 million and it was to be financed by China Eximbank with a $73.6 million loan and $7.4 million from Uztransgaz. It was expected that the proceeds from the China Eximbank loan would be used to buy the necessary equipment to install a modern supervisory control and data acquisition (SCADA) system -- i.e. a 2,000 km fiber optic line -- alongside a gas pipeline. The purpose of the SCADA system was to minimize leakages in the gas transportation system. The project was to be launched in 2008 and implemented within 1.5 years. In June 2010, Uztransgaz and Alcatel-Lucent Shanghai Bell Co. signed a $77.5 million agreement to implement the project. However, in May 2012, Uzbekneftegaz said that the project had been suspended due to a technical dispute, but did not disclose any further details. Then, in 2013, Alcatel-Lucent Shanghai Bell Co. and Uzbekneftegaz signaled that they working to resolve their dispute. The final status of the project is unclear, so for the time being it remains status-coded as an official commitment that never reached implementation.

Number of official sources

2

Number of total sources

6