MOFCOM provides RMB 50 million interest-free loan through economic and technical cooperation agreement (ETCA) following floods (linked to #52283)

On January 29, 2015, the Chinese Government and the Government of Malawi signed two economic and technical cooperation (ETCA) agreements in the aftermath of the worst floods to hit the country since independence. This first agreement was an RMB 130 million (US$25 million) grant agreement and the second agreement was an RMB 50 million (US$8 million) interest-free loan. The proceeds from the interest-free loan (this project) and the grant were to be used to deal with the aftermath of the floods which had inundated nearly all the districts across the country. Malawi's Minister of Finance, Goodall Gondwe, said that the grant proceeds would be used to expand Thyolo Secondary School, renovate technical colleges, drill boreholes in various districts around the country, provide technical cooperation for Bingu National Stadium, and maintain the newly-constructed Parliament Building. It is unknown if the funds were ever disbursed, and if so when. However, the proceeds from this grant were likely used to support project ID#52324, project ID#57896.

Additional details

This project is linked to project #52283 (where a grant of $16 million USD will be used to improve education as well as drinking water especially for the rural people in Malawi) --the RMB 130 million grant that was also committed on January 29, 2015. Since loan terms for the interest-free loan are unavailable, AidData has set maturity period to 20 years by default and grace period to 10 years by default per China's Foreign Assistance White Paper (http://www.cidca.gov.cn/2018-08/06/c_129925064_3.htm) which states that the maturity period of interest-free loans is 20 years, with a drawdown period of 5 years, grace period of 5 years, and repayment over 10 years. AidData treats the drawdown period as providing 5 years of additional grace.

Number of official sources

1

Number of total sources

7