Narrative
Full Description
Project narrative
On December 21, 2015, the Government of Zambia and ICBC signed a $135,806,251.37 commercial loan agreement for the Hospital Construction and Associated Works Project. The proceeds of the loan were to be used by the borrower to finance 85% of the cost of a $159 million commercial contract between the Government of Zambia and China National Complete Engineering Corporation (CNCEC), which was signed in November 2014 and amended in February 2015. The Government of Zambia agreed to cover the remaining 15% of the commercial contract cost. The borrowing terms of the loan are unknown. However, Sinosure apparently provided a credit insurance policy. The project involved the construction of Lusaka Specialised Hospital, the Chinsali General Hospital, and the Petuake General Hospital. The Chinsali General Hospital Construction Project involved the construction of a provincial general hospital in the town of Chinsali with 102 doctors’ residences, 4 dormitories for nurses, a nurse training school; and the procurement and installation of medical equipment, furnitures, appliances, teaching facilities and office equipment. Petuake General Hospital is located in the town of Petauke. Lusaka Specialised Hospital is located in Chongwe district near Kenneth Kaunda International Airport (on Kenneth Kaunda International Airport Road). On August 23, 2016, Zambia’s Ministry of Construction handed over the project site to CNCEC for preparatory work. Then, on October 26, 2016, Zambia’s Ministry of Finance made a 15% advance payment (worth approximately $24 million dollars) to CNCEC. Construction began in June 2017. However, a formal groundbreaking ceremony (for the construction of the Lusaka Specialised Hospital) did not take place until October 17, 2017. By May 2018, the project had achieved a 40% completion rate. Then, on October 10, 2019, a medical equipment delivery ceremony was held. The project was originally scheduled to reach completion by May 2020. As of May 19, 2020, the Chinsali General Hospital and Petuake General Hospital were already in use; however, the specialized hospital in Lusaka was still being constructed at that time. The Lusaka Specialised Hospital was put into use on June 5, 2021.
Staff comments
1. The Chinese project title is 赞比亚钦萨利医院项目 or 钦萨利医院 or 钦萨利、佩塔乌凯 综合医院及卢萨 卡专科医院项目 or 赞比亚医院项目 or 赞比亚医院及配套工程项目. 2. The Government of Zambia also signed a $24 million loan agreement in 2016 with Standard Chartered Bank (China) Limited for the same project; however, it is unclear how the proceeds of this loan were used. Some Chinese sources characterize the loan to be a commercial loan. 3. SAIS-CARI refers to the ICBC loan as a loan that supported the ‘Chinsali General Hospital Project’. However, multiple official and unofficial sources confirm that the loan supported the construction of Lusaka Specialised Hospital, the Chinsali General Hospital, and the Petuake General Hospital. 4. There is some circumstantial evidence (see http://en.cmcec.com/xwzx_6391/mtjj/201910/t20191017_224902.html) that suggests China Construction Bank (CCB) may have also supported this project. This issue warrants further investigation. 5. According to the World Bank's Debtor Reporting System (DRS), the weighted average grace period of all ‘private’ sector lending from all Chinese creditors to government and government-guaranteed borrowing institutions in Zambia was 3.89 years in 2016. AidData estimates the grace period of the ICBC loan that supported the Hospital Construction and Associated Works Project by using this figure. See https://www.dropbox.com/scl/fi/ef7q4y9pxjk6q3syuqmjy/May-2024-DRS-Extraction-of-Data-on-Official-and-Private-Chinese-Loans-to-Iran-and-Borrowing-Terms.xlsx?rlkey=wiqjmhuwunp3jelz3jyfepny8&dl=0 6. According to the World Bank's Debtor Reporting System (DRS), the weighted average maturity of all ‘private’ sector lending from all Chinese creditors to government and government-guaranteed borrowing institutions in Zambia was 16.5015 years in 2016. AidData estimates the maturity of the ICBC loan that supported the Hospital Construction and Associated Works Project by using this figure. See https://www.dropbox.com/scl/fi/ef7q4y9pxjk6q3syuqmjy/May-2024-DRS-Extraction-of-Data-on-Official-and-Private-Chinese-Loans-to-Iran-and-Borrowing-Terms.xlsx?rlkey=wiqjmhuwunp3jelz3jyfepny8&dl=0 7. According to the World Bank's Debtor Reporting System (DRS), the weighted average interest rate of all ‘private’ sector lending from all Chinese creditors to government and government-guaranteed borrowing institutions in Zambia was 4.2602% in 2016. AidData estimates the interest rate of the ICBC loan that supported the Hospital Construction and Associated Works Project by using this figure. See https://www.dropbox.com/scl/fi/ef7q4y9pxjk6q3syuqmjy/May-2024-DRS-Extraction-of-Data-on-Official-and-Private-Chinese-Loans-to-Iran-and-Borrowing-Terms.xlsx?rlkey=wiqjmhuwunp3jelz3jyfepny8&dl=0