Narrative
Full Description
Project narrative
On December 29, 2017, the Government of Argentina signed a decree to call for the Direct Contracting for Exclusivity with CRRC Qingdao Sifang for the acquisition of 200 cars and other supplies. Then, on March 25, 2019, China Development Bank and Argentina’s Ministry of Treasury signed a $236,000,000 buyer's credit loan agreement for the General Roca Railway Equipment Acquisition Project. The loan was previously authorized by the Government of Argentina on February 22, 2019. The loan carried the following borrowing terms: an interest rate of LIBOR plus a 2.4% margin, a 2% default (penalty) interest rate, a 3 year grace period, a 18 year maturity, a 1% upfront (management) fee, and a 0.25% commitment fee. The borrower also purchased export credit insurance from Sinosure. The proceeds of the loan are to be used by the borrower to finance 84.9175% of the $277,916,696.07 cost of a commercial contract between the Ministry of Transportation of Argentina and CRRC Qingdao Sifang Co. Ltd., which was signed on April 23, 2018. As of May 2022, this loan had not yet disbursed. The purpose of the project is to acquire 200 railway cars — known as electric multiple units (EMUs) — for the General Roca Railway (Ferrocarril Roca Eléctrico) as well as spare parts, tools, and technical support. The contractor responsible for project implementation is CRRC Qingdao Sifang Co. Ltd. It is unclear if this project has entered implementation. Previously, in 2013, in order to modernize and renovate the Buenos Aires city railway line, the Argentine Ministry of Transportation purchased a total of 709 intercity EMUs from CRRC Sifang Co., Ltd. The 200 intercity EMU orders signed this time are an addition to the General Roca Railway (Ferrocarril Roca Eléctrico) and are part of the comprehensive passenger rail transportation plan for the Buenos Aires region. After this purchase, the General Roca Railway (Ferrocarril Roca Eléctrico) will complete the replacement of all old vehicles.
Staff comments
1. The flow type is Export Buyer's Credit because the financing agreement covers 85% of the total project value, received export buyer's credit insurance from Sinosure, and is designated for the specific purpose of acquiring materials from CRRC Qingdao Sifang, a Chinese based company. 2. This project is also known as the 200 Roca Railway Car Acquisition Project. The Spanish project title is Adquisición de EMUs para el Ferrocarril Roca Eléctrico or Adquisición de EMUS para el Ferrocarril Roca Eléctrico (CRRC QINGDAO SIFANG CO., LTD). The Chinese project title is 罗卡线电动车组增购项目. 3. The CDB loan contract can be accessed in its entirety via https://www.documentcloud.org/documents/20484893-arg_2019_471. 4. The all-in interest rate for the loan was calculated by adding average 6-month LIBOR in January 2019 (2.848%) to 2.4%. 5. The Government of Argentina's internal identification number for the CDB loan is 100001166/CDB-0. 6. Resolution 1039/2018 contains information about the commercial contract and Decreto 144/2019 contains information about the loan authorization.