China Eximbank provides RMB 461 million government concessional loan for Maurice Bishop International Airport Upgrade and Runway Paving Project

Project narrative

In January 2017, China Eximbank and the Government of Grenada signed a RMB 461 million (USD 67,740,000 or EC$178.2 million) government concessional loan (GCL) agreement for the Maurice Bishop International Airport Upgrade and Runway Paving Project. The GCL carried the following borrowings terms: a 6.25 year grace period, a 21.25 year maturity, and a 2-year interest rate. The borrower is responsible for making semi-annual repayments between March 21, 2023 and March 21, 2038. According to the Ministry of Finance's Quarterly Public Debt Bulletin, the GCL disbursed $0 in quarter 4 of 2020, EC$45.76 million in quarter 1 of 2021, EC$4.28 million in quarter 3 of 2021, EC$2.99 million in quarter 4 of 2021, and $0 in quarter 1 of 2022. The GCL's (principal) amount outstanding was EC$63,073,767 as of December 31, 2021, EC$67,267,596 as of December 31, 2022, and EC$122,630,494 as of December 31, 2023. The purpose of the project is to upgrade the Maurice Bishop International Airport (MBIA) by constructing a parallel taxiway, a bypass road, loading bridges, addition of a new runway, passenger tunnels, cargo center expansion, passport kiosks, and emergency center. The project site is located on a peninsula in the extreme south-western section of the island of Grenada, seven miles from the country's capital (St. George). China Harbor Engineering Company (CHEC) is the contractor responsible for project implementation. A formal groundbreaking ceremony took place on October 28, 2020. During calendar year 2021, the following activities were undertaken: (1) detailed designs of Bypass Road (1.3 km of asphalt pavement) and the EOC Building were received and reviewed by a consultancy firm; (2) detailed designs of the runway overlay were received and reviewed based on the requirements of the Grenada Airport Authority (GAA) — inclusive of the Terminal Enhancement (2) Passenger Boarding bridges, remodeling of airside arrival area, installation of elevators/ escalators/ stairs), Airfield & Lighting (9003ft x 148ft runway resurfacing, airfield lighting system upgrade, aircraft apron expansion, canopy installation); (3) procurement activities commenced for the PAPI lighting system and the Environmental Impact Assessment (EIA); (4) preparatory works for the installation of the asphalt plant were undertaken; (5) tender evaluation of consultancy firm was undertaken; and (6) a Project Engineering Consulting firm was appointed. Physical infrastructure works were expected to accelerate in calendar year 2022. During a visit to the project site by the Chinese Ambassador to Grenada, Wei Hongtian, on August 15, 2022, project leaders reported that the runway resurfacing and paving had recently begun, and work on the aircraft apron expansion, passenger boarding bridges, emergency center, and off-site bypass roads had made substantial progress. During a subsequent visit by Ambassador Wei on November 11, 2022, project leaders reported that the runway renovation was complete, and that the project team was striving to hand the project over to Grenadian officials by the planned July 2023 completion date. According to the Council on Foreign Relations, as of January 2025 the project has not yet been completed. At the October 28, 2020 groundbreaking ceremony, Grenada’s Prime Minister acknowledged rising public concern and scrutiny about the government’s capacity to repay the loan and the fact some local residents had criticized the project on the grounds that they country has more urgent infrastructure needs than an airport upgrade. Around the same time, Grenada’s Tourism and Civil Aviation Minister, Dr. Clarice Modeste-Curwen, was asked to address concerns about the country’s ability to repay such a huge loan, especially given the economic downturn brought on by COVID-19. She argued that Grenada would need the airport upgrade if the country is to attract more and bigger airlines. In November 2020, a former Chief Executive at Maurice Bishop International Airport (MBIA) raised questions about the wisdom of borrowing from China Eximbank to finance the airport’s expansion. He said ‘I am predicting default’ and noted that the airport ‘was barely sustaining itself with a little bit of profit’. Then, in April 2021, reports emerged that China Eximbank and the Government of Grenada were renegotiating the terms and conditions on the existing loan agreement.