CMEC provides $67.3 million supplier's credit for Phase II of the Electricity System and Open Access Network of Hulhumale Project

Project narrative

On July 16, 2018, China Machinery Engineering Corporation (CMEC) and the Housing Development Corporation (HDC) signed a $67,313,003 supplier's credit (loan) agreement for Phase II of the Electricity System and Open Access Network of Hulhumale Project. The known borrowing terms of the loan are as follows: a 10 year maturity and an interest rate of unspecified LIBOR plus a 3.30% margin. The loan was to be repaid bi-annually. The borrower purchased credit insurance from Sinosure. The Government of the Maldives also issued a sovereign guarantee in support of the loan. The borrower was expected to use the proceeds of the loan to finance 80% of the cost of a $84,113,003 commercial contract between CMEC and HDC. The borrowing terms of the supplier's credit were to reflect that of the commercial contract. The remaining 20% of the cost of the commercial contract was financed with a $16,800,000 loan from Seylan Bank PLC (Sri Lanka), which was signed on August 16, 2018. CMEC made loan disbursements worth $5,131,221 during calendar year 2021 and $16,229,092 during calendar year 2022. No repayments were made during calendar year 2020 or calendar year 2021. The loan's amount outstanding was $5,131,221 as of December 31, 2021 and $21,360,313 as of December 31, 2022. The project involves the construction of a power transmission and distribution system in Hulhumale' with transmission-level voltage of 132kV. More specifically, this project involves the construction of 132 kV transmission line from the existing STELCO Power House to a new 132 kV substation on Hulhumalé island. China Machinery Engineering Corporation (CMEC) is the contractor responsible for project implementation. The project was originally expected to commenced on February 18, 2021 and conclude on June 18, 2022. The project ultimately commenced on January 18, 2021.