ICBC provides $274.61 million loan for 2350-Unit Police and Security Force Housing Project

In January 2016, the Government of Zambia and the Industrial and Commercial Bank of China (ICBC) signed a $274,612,768.07 loan agreement for the 2350-Unit Police and Security Force Housing Project. The proceeds of the loan were to be used by the borrower to finance 85% of the cost of a $323,073,844.79, three-year commercial (EPC) contract between the Government of Zambia's Ministry of Home Affairs and AVIC International, which was signed in December 2014. The Government of Zambia was responsible for directly financing the remainder (15%) of the project cost. As of July 2022, the ICBC loan had achieved a 97.9% disbursement rate ($268,959,363.78 out of $274,612,768.07). The purpose of the project was to construct 2,350 housing units for members of Zambia's Ministry of Home Affairs: Zambia Police Service, Zambia Correctional Services, the Immigration Department, and the Drug Enforcement Commission. These housing units included 997 low-cost units, 1,238 medium-cost units, and 115 high-cost units. AVIC International and China 15th Metallurgical Construction Group Co. Ltd. were the contractors responsible for project implementation. The project was implemented in two phases. Phase 1 was made up of four sites: Chelston in Lusaka (48 houses); Silverest in Lusaka, Chongwe area (41 houses); Kawama in Kitwe (24 houses); and Mukobeko in Kabwe (42 houses). Phase 1 officially launched on October 27, 2015, but Phase 1 construction did not begin until July 7, 2017. Phase 2 construction activities ended on June 20, 2020. On July 29, 2022, the Ministry of Finance & National Planning (MOFNP) of Zambia announced that it was seeking lender approval to formally cancel the ICBC loan’s undisbursed balance ($5,653,404.29); however, it also noted that it had not yet secured formal lender approval for this action. This announcement came approximately 21 months after the Government of Zambia defaulted on its repayment obligations to Eurobond holders and approximately 6 weeks after China, France, and 14 other countries formed a creditor committee to discuss the Zambian authorities’ request for a debt treatment under ‘the Common Framework for Debt Treatment beyond the DSSI’ endorsed by the G20 and the Paris Club.

Additional details

1. This project is also known as the Police and Security Housing Project and the Security Wing Project. The Chinese project title is 赞比亚保障房项目 or 赞比亚干警住宅项目 or 中航国际内政部保障房 or 赞比亚内政部预制保障房项目. 2. In the database of Chinese loan commitments that it released in July 2020, SAIS-CARI identifies this loan as a $275 million syndicated loan supported by ICBC, China CITIC Bank, and Bank of Jiangsu.

Number of official sources

20

Number of total sources

30