ICBC provides $2.5 billion loan for Phase 1 of Kilamba Kiaxi Housing Construction Project (Linked to Project ID#67333, #53063)

On November 19, 2010, the Industrial and Commercial Bank of China (ICBC) and Sociedade Nacional de Combustiveis de Angola (Sonangol) — Angola’s state-owned oil company — signed a multi-currency (USD and RMB), oil-backed, $2.5 billion facility (loan) agreement for Phase 1 of Kilamba Kiaxi Housing Construction Project. The borrowing terms of this loan are unknown. However, it is known that this loan was repaid ahead of schedule (on June 30, 2017) as part of a debt refinancing agreement with China Development Bank (captured via Project #53063). It is also known that the loan was to be serviced and secured with the proceeds from the sale of 10,000 barrels per day (bpd) of oil in 2010, 40,000 bpd between 2011-2013, and 30,000 bpd between 2014-2016. The loan proceeds were used to be used by the borrower partially finance a $3.535 billion commercial (EPC) contract for the construction of the Kilamba Kiaxi housing district, which is 30 kilometers southwest of Luanda and has a capacity to accommodate 200,000-500,000 people. The project involved the construction of 710 buildings with 20,002 apartments, 246 shops, 24 kindergartens, 9 primary schools, 8 secondary schools, 2 electricity substations, 1 sewage treatment plant, 1 water treatment plant, primary and secondary municipal roads, and various municipal systems such as water supply, power supply, telecommunications, sewage, drainage, traffic signals, etc. CITIC Construction — a subsidiary of CITIC Group, a Chinese state owned conglomerate — was the contractor responsible for project design and implementation. It signed the EPC contract on November 14, 2007 and a groundbreaking ceremony took place on August 31, 2008. A total of 60,000 workers implemented this project, 60% of whom were Angolan workers. The originally scheduled completion date of the project was April 2012 but the project was ultimately completed on September 17, 2012. According to CITIC, the housing project had achieved a 75% occupancy rate by May 2014. However, in August 2010, the President of Angola promised that the state-subsidized housing units would be sold to Angolan families for a maximum price of $60,000, and the units were ultimately marketed at price points (between $125,000 – $200,000) that were two to three times the promised price point and well beyond the means of the families for which they were ostensibly intended. This prompted criticism that the project primarily served as vehicle for wealth generation for the politically connected.

Additional details

1. This project is also known as the First Phase of the Angola Social Housing Project or Phase 1 of the Kilamba Kiaxi Satellite City Project or Phase 1 of the Kilamba Kiaxi New Town Project. The Portuguese project title is Nova Centralidade de Kilamba Kiaxi. The Chinese project title is 建的安哥拉KK新城一期工 or 安哥拉K.K.一期项目 or 安哥拉社会住房项目K.K.一期工程 or 安哥拉社会住房项目凯兰巴 • 凯亚西 or 安哥拉社会住房项目一期工. 2. ICBC also provided a $550 million loan for Phase 2 of the Kilamba Kiaxi Housing Construction Project (as captured via Project ID#67333).

Number of official sources

18

Number of total sources

27