Project ID: 484

China Eximbank provides $2 billion oil-backed buyer’s credit loan facility for infrastructure projects (linked to #62125, #62264)

Commitment amount

$ 3526866550.0

Constant 2017 USD

Summary

Funding agency [Type]

Export-Import Bank of China [State-owned Policy Bank]

Recipient

Equatorial Guinea

Sector

Other multisector (Code: 430)

Flow type

Export Buyer's Credit

Concessional

No

Category

Intent

Mixed (The next section lists the possible statuses.)

Commercial

Development

Representational

Mixed

Financial Flow Classification

OOF-like (The next section lists the possible statuses.)

Official Development Assistance

Other Official Flows

Vague (Official Finance)

Flows categorized based on OECD-DAC guidelines

Project lifecycle

Status

Implementation (The next section lists the possible statuses.)

Pledge

Commitment

Implementation

Completion

Suspended

Cancelled

Milestones

Commitment year

2006

2006-10-31

Planned implementation start

Description

In late 2006, China Eximbank and the Government of Equatorial Guinea signed a $2 billion buyer’s credit facility agreement (互惠贷款) for various infrastructure projects (see ''Republic of Equatorial Guinea: 2010 Article IV Consultation'' and ''IMF Executive Board Concludes 2012 Article IV Consultation with Equatorial Guinea'' p. 349 and ''为落实中赤几框架协议,我经商参处参赞拜会赤几财政与矿产部长''). All subsidiary loans approved under this buyer’s credit facility agreement carry the following terms: a 5.5% interest rate, 5 year maturity, and 2 year grace period (see ''Republic of Equatorial Guinea: 2010 Article IV Consultation'' and ''Obiang loves China''). Individual loans were drawn in tranches and amortized, but the overall facility resembled a revolving credit line. These loans were secured via deposit accounts opened by Government of Equatorial Guinea in China Eximbank. The Government of Equatorial Guinea deposited the proceeds from hydrocarbon exports into these accounts. The required deposit level increased with the utilization of the credit facility, and because the funds represented collateral, the account balances were not freely available to be repatriated (see ''Republic of Equatorial Guinea: FIRST REVIEW UNDER THE STAFF-MONITORED PROGRAM—PRESS RELEASE; AND STAFF REPORT'' p. 28 and ''EASTERN PROMISES: NEW DATA ON CHINESE LOANS IN AFRICA, 2000 TO 2014''). A repayment guarantee equivalent to 30 percent (minimum) of the outstanding stock of debt was required to be in the accounts at all times (see ''Republic of Equatorial Guinea: 2010 Article IV Consultation'').In 2014, nearly all of the Government of Equatorial Guinea's external debt was related to this credit facility (see ''Republic of Equatorial Guinea: STAFF REPORT FOR THE 2015 ARTICLE IV CONSULTATION—DEBT SUSTAINABILITY ANALYSIS''). As of 2012-2013, $1 billion had been drawn from the facility (see ''China and Equatorial Guinea sign US$2bn loan deal'' and ''Chinese consortium wins US$1bn electrification project””), and the Government of Equatorial Guinea was still drawing on the credit line as of 2018 (see ''Republic of Equatorial Guinea: STAFF-MONITORED PROGRAM'' p. 55).Subsidiary loans approved under this facility include:Project ID#1056 for the Bata port rehabilitation projectProject ID#61136 for the Malabo International Airport expansion projectProject ID#61151 for the Micameseng-Bongora road project Project ID#2108 for the Bata Grid project (Phase I)Project ID#30542 for a joint venture between ZTE and the Equatorial Guinean governmentProject ID#67139 for the Bata five-star hotel projectProject ID#61531 for military camp construction Project ID#61538 for the construction of Bata university buildingsProject ID#61539 for the construction of the Malabo National Park Project ID#205 for the Malabo Urban Power Grid Project Phase IProject ID#61631 for the Malabo Urban Power Grid Project Phase II Project ID#61634 for the Malabo Natural Gas Power PlantProject ID#61637 for the Malabo Convention Centre Project ID#995 for construction of the Djiploho Hydropower Station ProjectProject ID#62082 for the Djibloho Power Transmission and Transformation ProjectProject ID#62127 for the Djibloho Regulating Reservoir Project Project ID#62131 for the New Capital of Oyala (Djibloho) Construction ProjectIn June 2012, China Eximbank expanded the buyer’s credit facility agreement (i.e. credit line) by $174 million to cover the cost of a Malabo Electrification Project (#62264).In 2015, China Eximbank expanded the buyer’s credit facility agreement (i.e. credit line) by another $500 million. This expansion, which is captured in umbrella Project ID#62125, supported the New City of Djibloho Project (Project ID##62131).

Additional details

Project ID#484 is not categorized as umbrella project because the full amount of the $2 billion facility was likely disbursed (since China Eximbank decided to increase the size of the facility to $2.5 billion in 2015). Also, AidData was not able to identify the face values of all subsidiary loans approved through this facility. Therefore, to effectively approximate the total amount of debt issued through this facility and eliminate the risk of double counting, AidData does not record transaction amounts for the subsidiary loans. Instead, it records the full value ($2 billion) of the original facility agreement.

Number of official sources

13

Number of unofficial sources

11

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Details

Cofinanced

No

Receiving agencies [Type]

Government of Equatorial Guinea [Government Agency]

Implementing agencies [Type]

Government of Equatorial Guinea [Government Agency]

Loan type

Non-Concessional

Maturity

5 years

Interest rate

5.5%

Grace period

2 years

Grant element

12.24126198%

Gurarantee provided

No

Insurance provided

No

Collateralized/securitized

Yes

Collateral

The buyer's credit loans under the $2 billion USD facility were secured via deposit accounts opened by Government of Equatorial Guinea in China Eximbank. The Government of Equatorial Guinea deposited the proceeds from hydrocarbon exports into these accounts. A repayment guarantee equivalent to 30 percent (minimum) of the outstanding stock of debt was required to be in the accounts at all times.