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

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 estimated borrowing terms of the loan are as follows: a 5.5 year maturity, a 1 year grace period, and an interest rate of 6-month LIBOR plus a 3.5% margin. 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 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. The first CMEC loan disbursement (worth $5,131,221) took place during calendar year 2021. 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. 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.

Additional details

1. The borrowing terms of the CMEC loan are unknown. For the time being, AidData relies on the borrowing terms that applied to the Seylan Bank PLC (Sri Lanka) loan for the same underlying commercial contract. 2. AidData has estimated the all-in interest rate by adding 3.5% to the average 6-month LIBOR rate in July 2018 (2.489%). 3. This project is also known as the Phase II Electricity Network Project and the 132KV Electrical Network in Hulhumale' Project. 4. The amounts outstanding and repayments data are drawn from https://www.dropbox.com/s/q82x5hte85kc20e/105._Statement_of_Government_Guarantees_Audit_Report_2021.pdf?dl=0 and https://www.dropbox.com/s/rik8ynrjweat5aw/StatementOfGovernmentGuaranteesFinancialYear2020%20%281%29.pdf?dl=0 5. Several sources identify the lender as Browns-CMEC.

Number of official sources

12

Number of total sources

16