[Canceled] ICBC provides $104.8 million loan for acquisition of one Boeing 787-8 aircraft (Linked to Project ID#72173)

On March 1st, 2018, the Industrial and Commercial Bank of China (ICBC) and the National Bank for Foreign Economic Affairs of the Republic of Uzbekistan (NBU) (CDB) signed a $104.8 million loan agreement to finance the acquisition of one Boeing 787-8 aircraft. The ICBC loan carried the following borrowing terms: a 10-year maturity, a 3-year grace period, an interest rate of 6-month LIBOR plus a 3.5% margin, a 0.3% commitment fee, and a 0.3% management fee. The National Bank for Foreign Economic Affairs of the Republic of Uzbekistan reportedly on-lent the proceeds of the ICBC loan to Uzbekistan Airways. The proceeds of the ICBC loan were to be used by the borrower to partially finance a commercial contract that Uzbekistan Airways signed with Boeing (USA) for the acquisition of four new Boeing 787-8 aircraft between 2018 and 2020 (including three Boeing 787-8 aircraft for delivery in 2019-2020). The proceeds of the ICBC loan were to be used to finance one of the four aircraft, which Uzbekistan Airways also pledged as a source of collateral (that the lender could seize in the event of default). The other three Boeing 787-8 aircraft were supposed to be financed with a $100.41 million loan from the Fund for Reconstruction and Development of Uzbekistan (FRDU) and two loans worth $212.65 million (one worth $105.53 million in 2019 and another worth $107.12 million in 2020) from China Development Bank. Each of these loans was earmarked for the acquisition of a single Boeing 787-8 aircraft. However, the ICBC loan was subsequently canceled for unknown reasons.

Additional details

1. The all-in interest rate was calculated by adding 3.5% to the average 6-month LIBOR rate in 2018 (2.489%). 2. The Russian project title is Приобретение четырех новых самолетов "Боинг-787-8”. 3. Project ID#72173 captures the $107.12 million CDB loan. It is unclear whether the $105.53 million ever materialized. 4. The ICBC loan is not included in the Government of Uzbekistan’s public debt register (https://www.dropbox.com/s/68zuiadtulh2thm/Uzbekistan%202020%20State%20Debt%20Report.pdf?dl=0), which likely reflects the fact that it was canceled.

Number of official sources

7

Number of total sources

9