China Eximbank provides $884 million loan for the Aromatic Hydrocarbons Complex Construction Project at the Atyrau Refinery via the restricted portion of a master loan facility with Development Bank of Kazakhstan JSC (Linked to Project ID#54797)

On August 1, 2009, the Export-Import Bank of China (China Eximbank) entered into a master facility agreement with the Development Bank of Kazakhstan JSC (DBK). China Eximbank permitted DBK to draw down up to $5 billion from a master facility agreement (MFA), which included an unrestricted $1.5 billion tranche and a restricted $3.5 billion tranche. The agreement was for a period of up to 15 years and it prohibited DBK from incurring indebtedness exceeding 25% of its assets or disposing of over 25% of its assets, in addition to a change of control clause favoring China Eximbank. The restricted portion of the MFA was for projects with a Chinese component, whereas the unrestricted portion was for DBK’s general purposes. The restricted portion of the China Eximbank MFA was aimed at the development of energy, transport and communication infrastructure and the funding of strategic projects in the metallurgy, chemical, and oil industries. The proceeds from this credit facility were also be used for investment projects of Kazakhstani companies, including the exporting of industrial output, services and equipment to China. Under the restricted portion of the China Eximbank MFA (as captured via Project ID#54797), DBK entered into a $884 million individual credit agreement with China Eximbank on December 12, 2009. The maturity date of this individual credit agreement was July 21, 2023. Principal and interest under the agreement was to be paid semi-annually. The loan was prepaid in full in July 2019. DBK then used these loan proceeds to on-lend to Atyrau Refinery LLP (a project company and special purpose vehicle responsible for the financing, design, and construction of the Aromatic Hydrocarbons Complex Construction Project at the Atyrau Refinery) as part of a larger $1.63 billion loan agreement. This loan agreement with Atyrau Refinery LLP, which is a subsidiary of KazMunayGas (a state-owned oil and gas company in Kazakhstan), was divided into a $691.4 million tranche with an interest rate of 6-month LIBOR plus a 4.5% margin, a $40.4 million tranche with an interest rate of 7.72% per annum (payable in KZT), and a ₸58.536 million KZT tranche with an interest rate of 10.99% per annum (payable in KZT). Atyrau Refinery LLP was expected to use the loan proceeds to finance a $1.04 billion commercial contract that it signed with Sinopec Engineering on October 29, 2009. DBK also offered a ₸26.401 million KZT credit line for the project, while Atyrau Refinery LLP contributed $66.63 million. The purpose of the Aromatic Hydrocarbons Complex Construction Project was to construct an aromatic hydrocarbons complex at the Atyrau Refinery capable of producing benzol and paraxylene. It also sought to increase the plant's balanced capacity to 5 million tons per year and produce motor fuels that meet K3 environmental requirements. Sinopec Tenth Construction Co Ltd was the contractor responsible for project implementation. JSC OGCC KazStroyService served as its subcontractor, while KazMunayGas was also a participant. Construction was originally schedule to begin in January 2010. However, the construction ultimately began in October 2010. It was completed on December 25, 2014. The complex was officially put into operation in December 2015.

Additional details

1. The DBK credit agreement with China Eximbank was revised three times (on December 19, 2013, May 8, 2014 and October 30, 2014); however, the terms of these revisions are unknown (see pg.67 of "Development Bank of Kazakhstan Base Prospectus 2017"). 2. In the China’s Overseas Development Finance Dataset that Boston University's Global Development Policy Center published in December 2020, it identifies the face value of the China Eximbank loan that supported this project as $1.3 billion and the commitment year as 2008. AidData relies on the face value ($884 million) and commitment year (2009) of the loan reported by the borrower (DBZ). 3. China Eximbank provided a separate $1,130,408,642 buyer’s credit loan in 2012 to Atyrau Refinery LLP for a Deeper Oil Conversion Complex Project at the Atyrau Refinery (as captured via Project ID#39556). 4. This project is also known as the Atyrau Petrochemical Complex Project, the Complex for Production of Aromatic Hydrocarbons Project, and the 500000 mt/year Aromatics Facility at Kazakhstan’s Atyrau Oil Refinery Project. The Chinese project title is 哈萨克斯坦阿特劳炼油厂50 万吨/ 年芳烃装置. 5. AidData has estimated the all-in interest rate by adding 4.5% to the average 6-month LIBOR rate in December 2009 (0.453%).

Number of official sources

9

Number of total sources

18