China Eximbank provides $343.9 million preferential buyer’s credit for 77.66 km Bobruisk-Zhlobin Section of the M5/E271 Minsk-Gomel Highway Upgrading and Reconstruction Project (Linked to Project ID#42336)

On December 19, 2012, China Eximbank and the Government of Belarus signed a $343,900,000 preferential buyer’s credit (PBC) loan agreement [CHINA EXIMBANK № РВС (2012)56(244)] for the 77.66 km Bobruisk-Zhlobin Section of the M5/E271 Minsk-Gomel Highway Upgrading and Reconstruction Project. The PBC carried the following terms: a 2% interest rate, 15 year maturity, and 5 year grace period. Sinosure provided buyer’s credit insurance, which increased the effective interest rate to 2.16%. The Government of Belarus also issued a sovereign guarantee in support of the loan. The proceeds of the loan were on-lent to a state-owned company called RUE Gomelavtodor (РУП «Гомельавтодор»). RUE Gomelavtodor then used the loan proceeds to partially finance a commercial contract [№ 1/2012] that it signed with China Road and Bridge Corporation (CRBC) on February 29, 2012. The purpose of the project was to upgrade and reconstruct a 77.66 km section of the M5/E271 Minsk-Gomel Highway that runs from Bobruisk to Zhlobin. CRBC was the EPC contractor responsible for implementation. Construction formally started on December 1, 2014 and the road was originally scheduled to be completed and opened to traffic in September 2016. However, CRBC completed the project 2 months ahead of schedule. On July 2, 2016, a project completion ceremony took place and the road was opened to traffic.

Additional details

1. This project is also known as the Bobruisk-Zhlobin Highway Project. The Russian project title is Шоссе Бобруйск-Жлобин or М-5/Е271 Минск-Гомель на участке Жлобин-Гомель or проекта «Реконструкция автомобильной дороги М-5/Е 271 Минск – Гомель на участке Бобруйск – Жлобин». The Chinese project title is M-5/E271公路日洛宾至戈梅利段修复及升级工程项目 or M5/E271公路博布鲁伊斯克至日洛宾段公路. 2. The Government of Belarus’ sovereign bond prospectus states that the Chinese Government has lent it $662.1 million for road construction activities. This amount is almost exactly equivalent to the sum of the value of the two loans that China Eximbank issued in 2011 (captured in this Project ID#42336) and 2012 (captured in Project ID#46413) for the reconstruction and upgrading of two sections of the Minsk-Gomel highway M-5/E271 (the Gomel-Zhlobin Section and the Bobruisk-Zhlobin Section)

Number of official sources

20

Number of total sources

29