China Eximbank provides RMB 1 billion government concessional loan for Phase 2 of Kribi Deep Sea Port Project (Linked to Project ID#53396 and #350)

On January 19, 2016, China Eximbank expressed its willingness to finance Phase 2 of the Kribi Deep Sea Port Project. Then, on April 5, 2017, China Eximbank formally issued a $675.5 million ‘mixed credit’ to the Government of the Republic of Cameroon for Phase 2. It provided an RMB 1 billion government concessional loan (GCL) (captured via Project ID#53116) and a $524,579,992 preferential buyer's credit (PBC) loan (captured via Project ID#53396). The GCL carried the following borrowing terms: a 20 year maturity, a 2% interest rate, and a 7 year grace period. The PBC carried the following borrowing terms: a 22 year maturity, a 2% interest rate, and a 11 year grace period. Both loans were secured by (i.e. collateralized against) the revenues of the Autonomous Port of Kribi, which were to be deposited by the borrower into an escrow account (known as the ‘Control Account’). The proceeds of the GCL and the PBC were to be used by the borrower to finance a commercial contract between China Harbour Engineering Company Limited and Cameroon's Ministry of Economy, Planning and Regional Development (MINEPAT). As of December 31, 2020, the GCL had achieved a 21.1% disbursement rate (with an undisbursed balance of CFA 64.9 billion) and its amount outstanding was equivalent to CFA 17.3 billion. As of December 31, 2020, the PBC had achieved a 25.6% disbursement rate (with an undisbursed balance of CFA 200.9 billion) and its amount outstanding was equivalent to CFA 31.4 billion. Phase 2 involved the construction of a 1,102m long quay, the expansion of the container terminal from 700m to 1,050m, and the addition of both an ore and oil terminal. China Harbour Engineering Company Limited was the contractor responsible for implementation. Phase 2 was completed on March 2, 2018. China Eximbank also supported the Phase 1 of the Kribi Deep Sea Port Project (as captured via Project ID#350). There are some indications that the China Eximbank loan for the first and second phases of the Kribi Deep Sea Port Project may have financially underperformed vis-a-vis the original expectations of the lender. In January 2019, Cameroon unilaterally withheld debt service payments to China Eximbank. The lender responded by withholding new loan disbursements. Then, in July 2019, China Eximbank and the Government of Cameroon signed a debt rescheduling agreement (as captured via Project ID#88213). Under the terms of the agreement, China Eximbank agreed to reschedule 18 loans previously contracted by the Government of Cameroon — with scheduled principal repayments between July 2019 and March 2022 — by allowing the borrower to defer scheduled principal repayments between July 2019 and March 2022 to later dates but without any maturity extensions. The total amount of restructured debt was equivalent CFA 148 billion ($253 million) — or 70% of the loan principal that was scheduled for repayment between July 2019 and March 2022. Under the terms of the agreement, the Government of Cameroon agreed to repay 30% of the loan principal according to the original July 2019-March 2022 schedule (i.e. without any payment deferrals). The lender and the borrower also agreed to cancel the committed but undisbursed loan balances worth approximately CFA 10 billion (for certain loans with disbursement deadlines that had already passed). Then, in January 2020, the International Monetary Fund (IMF) classified the Government Cameroon as facing a high risk of debt distress. Eighteen months later, during an address before Cameroon’s National Assembly on June 28, 2021, the Minister of Water and Energy (MINEE) Gaston Eloundou Esommba provided an update on the ICBC-financed Bini à Warak Hydroelectric Power Plant Project. He noted that the project had been 'on hold' since November 2019 because ICBC suspended the loan agreement, even though the Government of Cameroon had already mobilized XAF 22 billion of counterpart funding. He also explained that 'the reason for this suspension is that Cameroon did not settle some of its debts towards China on time, so, it is in a cross-default situation.’

Additional details

1. The Chinese project title is 喀麦隆克里比深水港二期项目. The French project title is 2ème phase du projet de construction du port en eau profonde de Kribi or Phase 2 du port en eau profonde de Kribi or PROJET DE CONSTRUCTION DU PORT EN EAU PROFONDE DE KRIBI (PHASE 2). 2. One source refers to the face value of the PBC as $547,079,991; however, AidData relies on the $524,600,000 face value that is identified in the Government of Cameroon's Development Assistance Database (DAD). 3. The project ID number for this transaction in Cameroon's Development Assistance Database (DAD) is CAM/001055.

Number of official sources

9

Number of total sources

22