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Overview

China Development Bank extends $150 million line of credit to BICE to support SMEs in 2017 (Linked to Record ID#54558, #54559, #54560)

Commitments (Constant USD, 2023)$159,618,957
Commitment Year•2017Country of Activity•ArgentinaDirect Recipient Country of Incorporation•ArgentinaSector•Other MultisectorFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
May 17, 2017
Start (actual)
Oct 26, 2017
End (actual)
Jul 5, 2018
First repayment (originally scheduled)
May 17, 2019
Last repayment (originally scheduled)
May 15, 2024

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Ultimate beneficial owners

At least 25% host country ownership

Funding agencies

State-owned Policy Banks

  • China Development Bank (CDB)

Receiving agencies

State-owned Banks

  • Bancó de Inversión y Comercio Exterior (BICE) S. A.

Implementing agencies

State-owned Banks

  • Bancó de Inversión y Comercio Exterior (BICE) S. A.

Loan desecription

China Development Bank extends $150 million line of credit to BICE to support SMEs in 2017

Grace period•2 yearsGrant element•23.6448%Interest rate (t₀)•3%Interest type•Fixed Interest RateMaturity•7 years

Narrative

Full Description

Project narrative

On May 17, 2017, China Development Bank (CDB) signed a financing agreement with Argentina's Banco de Inversión y Comercio Exterior (BICE), extending a $150 million line of credit to support BICE's efforts to on-lend to local borrowers for projects that promote agro-industrial exports from SMEs in Argentina and explore sustainable energy sources as well as the investment projects undertaken by Chinese companies established in Argentina. The loan carried a 7-year maturity, a 2-year grace period, and an interest rate of around 3%. As of December 31, 2018, BICE had drawn down the full $150 million from the line of credit. $50 million was drawn down on October 26, 2017, $42 million was drawn down on December 22, 2017, and $58 million was drawn down on July 5, 2018. The $150 million credit line agreement came after the completion of a previous agreement to provide a $140 million line of credit over the course of 5 years (as captured via Record ID#54558, #54559, #54560). According to CDB, the purpose of the $150 million line of credit was to help SMEs in the field of renewable energy, energy infrastructure and agricultural manufacturing.

Staff comments

1. This credit line may have been initially pledged in a Memorandum of Cooperation signed on July 13, 2010 (see Record ID#69339). This issue warrants further investigation. 2. The CRS Sector field has been coded as 'Other Multisector' because the $150 million credit line was intended to support SMEs in both the Energy and Industry sectors. 3. Banco de Inversión y Comercio Exterior SA (BICE) is a state-owned bank in Argentina. 4. On June 29, 2023, CDB and BICE signed an amended version of the $150 million financing agreement, which 'replaced certain risk-free interest rates with the London interbank offered rate as the benchmark for calculating interest payments, thereby improving interest rate risk management. [...] The amendment bolstered the credibility and stability of the interest rate benchmark, enabling both parties to price interest rates more accurately and mitigating the effects of future interest rate fluctuations on borrowing costs.' See https://law.asia/china/china-outbound-deals-award-2024/ and https://law.asia/zh-hans/china/china-outbound-deals-award-2024/