China Eximbank provides $140.3 million preferential buyer’s credit for Ulaanbaatar-Khushigt Valley New Airport Highway Construction Project (Linked to Project ID#49148)

On November 10, 2015, China Eximbank and the Government of Mongolia signed a general loan agreement regarding the utilization of a $1 billion preferential buyer's credit (PBC) for various projects (as captured in Project ID#49148). Under the terms of the general loan agreement, all subsidiary (individual) loan agreements for specific projects carry identical borrowing terms: a 20 year maturity, a 7 year grace period, a 2% interest rate, a 0% default (penalty) interest rate, a 0% management fee, and a 0.25% commitment fee. Then, on July 14, 2016, China Eximbank and the Government of Mongolia subsequently signed two subsidiary loan (PBC) agreements: a $140,335,893.00 loan (PBC) agreement for the Ulaanbaatar-Khushigt Valley New Airport Highway Construction Project and a $7,207,921 loan (PBC) agreement [CHINA EXIMBANK PBC 2016 (19) TOTAL (407)] for the Ulaanbaatar-Khushigt Valley New Airport Highway Consultancy Service Project. The proceeds from the first PBC were to be used by the borrower to finance 100% of the cost of a $140,335,893 EPC (turnkey) contract between China Railway 4th Bureau Group (also known as China Tiesiju Civil Engineering Group Co., Ltd. or CTCE) and Mongolia’s Ministry of Roads and Transportation Development, which was signed on September 18, 2015 (and possibly amended on June 6, 2016). The proceeds from the second PBC were to be used by the borrower to finance 100% of the cost of a $7,207,921 supervision and consulting contract between Mongolia’s Ministry of Roads and Transportation Development and Guangzhou Wanan Construction Supervision Co., Ltd and "SRP Engineer Consulting Mongolia" LLC , which was signed on May 18, 2016. The purpose of the project was to construct a 32.226 km, two-way, six-lane expressway from Yarmag toll station to the new international airport in Khushig Valley and Tuv Province (Khushig Valley International Airport). The expressway passes through Sergelen soum of Tuv aimag, Altanbulag soum and Khan-Uul district. CTCE was the general EPC contractor responsible for implementation. However, “Arj Capital” LLC, “Erdene Zam” LLC and “Badrakh Oil” LLC were also involved in implementation as subcontractors. Guangzhou Wanan Construction Supervision Co., Ltd was responsible for project supervision. Construction commenced on May 6, 2016 and ended on October 12, 2018. The project was officially handed over to the local authorities on July 10, 2019.

Additional details

1. This project is also known as the Mongolian International Airport Highway Project and the Ulaanbaatar-Khushig Valley International Airport Expressway Project. The Chinese project title is 的蒙古国乌兰巴托新国际机场高速公路及那莱哈20.9公里公路 or 蒙古国乌兰巴托新机场高速公路项目 or 乌兰巴托新国际机场高速. The Mongolian project title is “Улаанбаатар-Хөшигийн хөндийн шинэ нисэх онгоцны буудлын хурдны автозам барих” төсөл or Улаанбаатар-Хөшигийнхөндий шинэнисэхонгоцныбуудлынхурдны замтөсөл or Улаанбаатар-Хөшигийн хөндийн хурдын авто зам. 2. The loan (PBC) agreement for the Ulaanbaatar-Khushigt Valley New Airport Highway Consultancy Service Project can be accessed in its entirety via https://www.dropbox.com/s/g47ysacy1k7r4zh/Mongolia%202016%20China%20Eximbank%20Loan%20for%20the%20Ulaanbaatar-Khushig%20Valley%20New%20Airport%20Road%20Construction%20Project.pdf?dl=0

Number of official sources

15

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