Narrative
Full Description
Project narrative
On July 28, 2000, the Chinese Government and the Republic of Congo signed a preferential loan framework agreement regarding the Loutété Cement Factory Reconstruction Project. Then, in 2003, the Export-Import Bank of China Eximbank provided a RMB 200,000,000 government concessional loan (GCL) for the Loutété Cement Factory Reconstruction Project in 2003. The loan carried an interest rate of 2%, a maturity of 19 years, and a grace period of 10 years. With the proceeds from this loan, a new public cement company called Société Nouvelle des Ciments du Congo (SONOCC) was established. SONOCC was a joint venture between Société Nationale Chinoise de Travaux de Ponts et Chaussées (SNCTPC) (56% equity) and the Republic of Congo (44% equity). The Loutété cement factory reconstruction project — under the ownership of SONOCC — began in 2003. The cement plant began production in May 2004. It ultimately achieved an annual cement production capacity of about 200,000 tons. CRBC was the contractor responsible for project implementation. There are some indications that the China Eximbank loan for the Loutété Cement Factory Reconstruction Project may have financially underperformed vis-a-vis the original expectations of the lender. In 2020, China Eximbank and the Republic of Congo signed a debt suspension agreement as part of the G-20 Debt Service Suspension Initiative (DSSI). Under the terms of the agreement, the lender agreed to suspend principal and interest payments due between May 1, 2020 and December 31, 2020 under multiple buyer’s credit loan (BCL) agreements and multiple government concessional loan (GCL) agreements (as captured via Record ID#95566 and ID#95571). Debt service payments under many of these loan agreements were again deferred in 2021 (as captured via Record ID#95573, 95572, 95570, and 95568). The IMF assessed the Republic of Congo to be in debt distress in 2021, 2022, and 2023.
Staff comments
1. This project is referred to as the Loutete Cement Factory Project in the Chinese Government’s 2011 White Paper on Foreign Aid. The Chinese project title is 的鲁特特水泥 or 鲁特特水泥厂恢复生产项目 or 中国鲁特特水泥厂 or 刚果（布）新水泥厂 or 刚果（布）鲁特特水泥厂恢复生产项目. The French project title is Modernisation de la cimenterie de Loutété. 2. SNCTPC is the French name for China Road and Bridge Corporation (CRBC). 3. In the database of Chinese loan commitments that SAIS-CARI released in July 2020, it does not identify the interest rate of the China Eximbank loan that supported this project. AidData records the interest rate (2%) that is reported by China’s Ministry of Commerce (MOFCOM). 4. The loan's maturity (19 years) and grace period (10 years) are drawn from the World Bank's Debtor Reporting System (DRS). See https://www.dropbox.com/s/949n5rctiue6d7c/IDS_Average_grace_period_and_maturity_on_new_external_debt_commitments.xlsx?dl=0 and https://www.dropbox.com/s/2sw4f7gluxa52fk/DRS%20Official%20Commitments%20from%20China%20Through%202021.xlsx?dl=0 5. It is not clear if the borrower of this China Eximbank loan was the Republic of Congo or SONOCC. This issue merits further investigation.