China Eximbank contributes $461 million to syndicated loan for Dhaka Elevated Expressway Construction Project (Linked to Project ID#92382)

On March 30, 2019, First Dhaka Elevated Expressway Company, Ltd. (FDEE or 公司第一达卡高架快速路有限公) — a project company and joint venture of China Shandong International Economic & Technical Cooperation Group Ltd (CSI) [34% equity stake], Sinohydro Corporation Ltd. [15% equity stake], and Italian-Thai Development Public Company Limited (ITD) [51% equity stake] — signed an $861 million syndicated loan agreement with China Eximbank and the Industrial and Commercial Bank of China (ICBC) for the Dhaka Elevated Expressway Construction Project. China Eximbank contributed $461 million to the loan syndicate (captured via Project ID#52763) and ICBC contributed $400 million to the loan syndicate (captured via Project ID#92382). The loan reportedly carried a 4% interest rate, but its maturity length and grace period are unknown. The project sponsors (CSI, Sinohydro Corporation Ltd., and ITD) issued loan repayment guarantees in proportion to their ownership stakes in FDEE (e.g. Sinohydro Corporation Ltd. guaranteed 15% of the $861 million loan). The proceeds of the loan are to be used by the borrower to partially finance a commercial (EPC) contract between Bangladesh Bridge Authority (BBA) and China National Import and Export Corporation, which was signed on November 30, 2017. The $1.263 billion project is a public-private partnership (PPP) that is being implemented on a build-operate-transfer (BOT) basis and financed according to a debt-equity ratio of 65:35. On April 2, 2020, the first loan disbursement (worth RMB 390 million) was made. By June 2023, the loan had achieved a 39.9% disbursement rate ($343.9 million out of $861 million). The purpose of the project is the design, construction, operation, and maintenance of a four-lane Elevated Expressway that will commence at Shahjalal International Airport and run alongside New Airport Road, with the rail alignment through the Mohakhali, Tejgaon, and Moghbazar to Kamalapur Railway-station and then the alignment crossing over Jatrabari before connecting to Dhaka Chittagong Highway. The scope of works includes the construction of culverts, toll plazas, underpass and overpass, lay byes, wayside amenities; installation of a computerized toll collection system, providing adequate lights and development of service areas with all required facilities. The total length of the Dhaka Elevated Expressway (also known as the Dhaka-Ashulia Elevated Expressway) is approximately 46.73 km. The construction of the expressway has been divided into three phases – first phase is 7.45km from Kawla (airport) to Banani; second phase is 5.85km from Banani Rail Gate to Moghbazar and third phase is 6.43km from Moghbazar to Kutubkhali. To ease traffic inside the capital, the 19.73km-long main elevated mainline of the expressway will have 31 connecting ramps with a combined length of 27km. China National Import and Export Corporation is the contractor responsible for implementation. On April 1, 2018, Bangladesh Bridge Authority issued the ‘Construction Commencement Date Notification’, which was considered authorization to begin implementation. However, construction did not begin until January 1, 2020 and the first loan disbursement was not made until April 2, 2020. Project implementation activities were temporarily suspended in mid-2020 due to the COVID-19 pandemic, but work resumed on September 7, 2020. The project achieved an overall completion rate 30.5% by September 2021, with the first phase at a 66.25% completion rate, the second phase at a 21.5% completion rate, and the third phase at a 2.33% completion rate. The project was originally expected to reach completion in July 2023. The expected completion date was later pushed back to June 2024. Once completed, 80,000 vehicles are expected to use the overhead road each day.

Additional details

1. This project is also known as the Dhaka – Ashulia Elevated Expressway Project (DAEEP). The Chinese project title is 孟加拉达卡机场高架快速路项目 or 孟加拉达卡机场高架高速路特许权项目 or 营的孟加拉国高架快速路项目 or 孟加拉达卡至阿苏利亚高架高速公路项目. The Bangla project title is ঢাকা এলিভেটেড এক্সপ্রেসওয়ে পিপিপি প্রকল্প. 2. Although the syndicated loan agreement was signed on April 25, 2019, financial closure was not achieved until March 30, 2020. 3. Sinosure provided overseas investment insurance in support of this project. 4. This loan that supported this project is not recorded the China’s Overseas Development Finance Dataset, which Boston University's Global Development Policy Center published in December 2020. 5. The concession period is 25 years and the construction period is 42 months. 6. In October 2021, Bangladesh’s National Board of Revenue (NBR) exempted income tax on interest on loans taken from China Eximbank ICBC for the Dhaka Elevated Expressway Construction Project. 7. At an early stage of the project’s development, China Development Bank considered providing a $750 million loan, but the deal ultimately fell through. 8. Some sources suggest that the syndicated loan agreement with China Eximbank and ICBC was signed on April 25, 2019 rather than March 30, 2019.

Number of official sources

17

Number of total sources

45