Narrative
Full Description
Project narrative
On December 4, 2012, China Eximbank and the Government of the Kyrgyz Republic signed a $129,825,916 preferential buyer's credit (PBC) agreement [CHINA EXIMBANK PBC NO. (2012) 54 TOTAL NO. (242)] for the Two Sections of Highway Rehabilitation Project. The loan (PBC) carried the following borrowing terms: a 20-year maturity, a 2% interest rate, a 0% default (penalty) interest rate, a 9-year grace period, a 0.25% management fee, and an 0.25% commitment fee. On April 1, 2013, Kyrgyz Parliament approved the loan agreement. The proceeds of the loan were to be used by the borrower to finance a September 22, 2012 commercial contract [ID#EXMB/KG/0BI-03] worth $129,825,916.30 between the Kyrgyz Ministry of Transport and Communications and China Road and Bridge Corporation (CRBC). According to the Government of the Kyrgyz Republic’s Aid Management Platform (AMP), the first loan disbursement (of $32,456,479) took place on September 30, 2013 and the second loan disbursement (of $32,456,500) took place on December 31, 2014. The same source notes that, as of 2015, the loan disbursement rate was 50% ($64,912,979 out of $129,825,916). According to internal data that the Kyrgyz Ministry of Finance shared with AidData in July 2022, this loan achieved a disbursement rate of 100% as of December 31, 2021 and its amount outstanding was $131,147,402.32 as of December 31, 2021. The project sought to rehabilitate the Osh-Batken-lsfana road (specifically, a road section from 220km to 232 km and a road section from 248 km to 360 km) and the Bishkek-Balykchi road (specifically, a road section from 147 km to 172 km). CRBC was the contractor responsible for project implementation. Construction began in July 2013. The Bishkek-Balykchy road segment was completed on July 22, 2015. The 127 km Osh-Batken-Isfana road section was completed on November 10, 2016. The section from kilometer 271 to kilometer 360 was completed in October 2018. However, there are some indications that the preferential buyer's credit for the Two Sections of Highway Rehabilitation Project (Osh-Batken-Isfana 127 km Section and Bishkek-Balykchy 25 km Section) financially underperformed vis-a-vis the original expectations of the lender. On or around July 1, 2021, China Eximbank and the Government of the Kyrgyz Republic signed a debt suspension agreement [No. DSSI2021PHASE2-029]. Under the terms of the agreement (captured via Record ID#96102), the lender agreed to suspend principal and interest payments due between July 1, 2021 and December 31, 2021 under the preferential buyer's credit agreement for the Two Sections of Highway Rehabilitation Project (Osh-Batken-Isfana 127 km Section and Bishkek-Balykchy 25 km Section).
Staff comments
1. The Russian name of this project is Реабилитация двух участков автодорог в КР. Balykchi is sometimes also referred to as Balykchy. 2. CRBC reports on its website that the length of the Osh-Batken-Isfana road being rehabilitated is 123.06 km, and the length of the Bishkek-Balykchy road being rehabilitated is 23.66 km. 3. The project identification number in the Government of the Kyrgyz Republic’s Aid Management Platform (AMP) is 8718835227. 4. The China Eximbank (PBC) loan agreement can be accessed in its entirety via https://www.documentcloud.org/documents/20488728-kgz_2012_421. 5. The debt suspension agreement [No. DSSI2021PHASE2-028] can be accessed in its entirety via https://www.dropbox.com/s/huwa695j3w9hwig/DSSI%20Agreement%20for%20Kyrgyz%20Republic.pdf?dl=0. 6. A detailed loan repayment reschedule (that the Kyrgyz Ministry of Finance shared with AidData in July 2022) can be accessed via https://www.dropbox.com/s/xg0cmomv0qk7cbj/Repayments.xlsx?dl=0. The schedule reflects actual repayments through December 31, 2021 and planned/scheduled repayments after December 31, 2021.Note also that (a) China Eximbank granted the Government of Kyrgyz Republic a a deferral of payments for the period from August 2021 to December 2021, and (b) the deferred principal and interest amounts are included in the main body of the debt and the repayment amounts of the deferrals (with additional accrued interest for granting a deferment) are already included in the repayment schedule.