China Eximbank provides RMB 365.9 million government concessional loan for Buca Bay and Moto Road Upgrade Project (Linked to Project ID#68572, 95363, 95365)

On December 28, 2010, China Eximbank and the Government of Fiji’s Ministry of Economy signed an RMB 365,990,000 government concessional loan (GCL) agreement for the Buca Bay and Moto Road Upgrade Project. The GCL carries a 2% interest rate, a maturity of 20.25 years (final maturity date: March 21, 2031), and an unknown grace period. The proceeds of the GCL were to be used by the borrower to finance a commercial contract with China Railway First Group (Fiji) Company Ltd. The loan’s (principal) amount outstanding was RMB 188,898,064.56 (FJD 58,914,656.94) as of June 30, 2023. The borrower made principal payments worth RMB 23,612,258.06 (FJD 7,671,942.70) and interest payments worth RMB 4,190,519.91 (FJD 1,361,474.54) between July 1, 2022 and June 30, 2023. The project consisted of two sub-components: (1) the construction of Moto Bridge and the upgrading of a 5 km segment of the Moto Road, and (2) the upgrading of a 10 km road segment from Nagigi to Naqere and a 20 km road segment from Naqere to Kasavu (including three 12 meter bridges). China Railway First Group (Fiji) Company Ltd. was the contractor responsible for implementation. The first project component commenced on January 12, 2012 and ended on October 4, 2013. Prime Minister Bainimarama said that Moto Road represented a commitment by the government to rural development, by providing a link for local farmers to markets, sugar cane farmers to Rarawai Mill, and access to schools. The second project component commenced on May 6, 2011 and ended on July 28, 2015. The Buca Bay Road reportedly helps helps get children to school, the sick to hospital, and produce or fish to market much faster (and in a fresher state). There are some indications that the China Eximbank loan for the Buca Bay and Moto Road Upgrade Project may have financially underperformed vis-a-vis the original expectations of the lender. In 2020, China Eximbank and the Government of Fiji 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 government concessional loan (GCL) agreements (as captured via Project ID#95365). Debt service payments under all or many of these loan agreements were again deferred in 2021 (as captured via Project ID#95363).

Additional details

1. Buca Bay Road is also known as Hibiscus Highway. 2. The Chinese project title is 斐济布扎贝公路升级改造项目. 3. In the Overseas Development Finance Dataset that Boston University’s Global Development Policy Center published in December 2020, it identifies this project as being supported by a USD $366 million China Eximbank loan. However, AidData relies on the face value of the loan (RMB 365,990,000) that Fiji’s Ministry of Economy reported to AidData’s Executive Director in April 2018 correspondence. See https://www.dropbox.com/s/uu8muq0ldgd8kjp/FW-%20Request%20for%20List%20of%20Loans%20from%20Chinese%20Government%20Institutions.eml?dl=0 4. The Buca Bay Road Upgrade Project and Moto Road Upgrade Project are part of four road construction projects agreed to by the Chinese Government and the Government of Fiji on December 22, 2010, and funded by China Eximbank (see Project ID#68572). 5. The 10 kilometer road section from Nagigi to Naqere was opened to traffic in September 2014. 6. The data on amounts outstanding and repayments were provided by Fiji's Ministry of Finance to AidData's Executive Director in June 2023. See https://www.dropbox.com/s/jqsnza05ar9r8x3/Data%20on%20data%20on%20disbursements%2C%20repayments%20and%20amounts%20outstanding%20under%20China%20Eximbank%20loans.pdf?dl=0 7. According to the World Bank's Debtor Reporting System (DRS), the weighted average grace period of all official sector lending from Chinese creditors to government and government-guaranteed borrowing institutions in Fiji was 5.6666 years in 2010. AidData estimates the grace period of the China Eximbank loan that supported the Buca Bay and Moto Road Upgrade Project by using this figure. See https://www.dropbox.com/s/949n5rctiue6d7c/IDS_Average_grace_period_and_maturity_on_new_external_debt_commitments.xlsx?dl=0

Number of official sources

19

Number of total sources

26