China Development Bank provides $40 million loan for Phase 1 of Danghara Oil Refinery Construction Project

Project narrative

On April 2, 2014, Dong Ying Heli Investment and Development Co. Ltd. (a private Chinese enterprise) and Tajikistan’s State-owned Assets Investment and Management Commission signed an investment agreement for the construction of an oil refinery in Danghara Free Economic Zone. The agreement was ratified by the upper and lower houses of Tajikistan (No. 1590) on October 9, 2014. Then, in 2016, China Development Bank (CDB) signed a $40 million loan agreement with TK-Oil (中塔石油丹加拉炼化) — a special purpose vehicle and joint venture of Dong Ying Heli Investment and Development Co. Ltd. (90% ownership stake) and a Tajik firm known as “Hasan and Co” (10% ownership stake) — for Phase 1 of the Danghara Oil Refinery Construction Project. The CDB loan carried an 8-year maturity, but its interest rate is unknown. The loan was was collateralized against Dong Ying Heli Investment and Development Co. Ltd.’s equity stake in the project company (TK-Oil). The purpose of the project was to construct an oil refinery in an 80 hectare area within the Danghara Free Economic Zone (FEZ). During the first phase of the project, the refinery was expected to reach a production capacity of 500,000 tons per year. Then, during the first phase of the project, the refinery was expected to reach a production capacity of 1.2 million tons per year. Phase 1 was expected to cost $80 million, while Phase 2 was expected to cost between $300 million and $500 million stage. The first line of the oil refinery was expected to be operational in late 2015, but it was postponed September 2016 at the latest. It was postponed again until March 2017 and then until July 2017. It was postponed yet again in January 2018, in order to stock up on enough crude petroleum. In July 2018, it was expected that the refinery would go into operation in September 2018. The refinery was ultimately put into production on June 15, 2019.