China Eximbank provides $59 million buyer’s credit loan for Sennar Bridge Construction Project (Linked to Record ID#57039)

Project narrative

On July 29, 2008, China Eximbank and the Government of Sudan signed a $3 billion oil-backed master framework agreement (or line of credit) to finance various infrastructure projects (captured via Record ID#57039). This resources-credit cooperation package is backed by future revenues from the sale of oil exports. Each subsidiary buyer’s credit loan (BCL) issued through the framework agreement carries a 15-year maturity and 5.6% interest rate. One of the subsidiary loans approved through this agreement in 2010 was a $59 million BCL for the Sennar Bridge Construction Project. The proceeds of the loan were to be used by the borrower to partially finance a $66 million commercial contract with China Harbour Engineering Company (CHEC), which was signed on January 13, 2009. The project involved the construction of (1) a 310 meter-long and 18.4 meter-wide highway bridge, (2) a 310 meter-long and 7 meter-wide railway bridge over the Blue Nile River and (3) two 70 meter-long and 7.2 meter-wide railway bridges over a canal. The project was located in the city of Sennar (Sinnar), 5 km downstream of the Sennar (Sinnar) Dam. Construction began on August 2010 and the project was completed on June 2, 2014. The completion of this project reportedly improved the traffic conditions on both sides of the Blue Nile River, promoted the economic development of the surrounding areas, and improved the living conditions of local residents. There are some indications that the China Eximbank loan issued for the Sennar Bridge Construction Projectt may have underperformed vis-a-vis lender expectations. According to Sudan’s Finance Minister Ali Mahmood Abdel-Rasool, China Eximbank suspended its financing for 11 projects in Sudan following the secession of South Sudan in July 2011, which triggered a major loss of oil revenue (a key source of collateral for China Eximbank loans). Ali Mahmood Abdel-Rasool said at the time that the Government of Sudan had previously pledged oil revenues (worth 120,000 barrels per day) to China Eximbank as a source of collateral. Then, on February 18, 2012, the Chinese Government announced that it had agreed to reschedule the outstanding debt obligations of the Government of Sudan by extending loan repayment periods by 5 years (as captured via Record ID#30421). According to the External Debt Unit of the Central Bank of Sudan, the Government of Sudan's total arrears to Chinese creditors amounted to $3.864 billion ($2.608 billion in principal, $1.129 billion in interest, and $127 million in penalty interest) as of March 31, 2022.