ICBC provides $65.297 million buyer’s credit loan for 70 km Road Construction Project (Linked to Project ID#92500 and #95966)

On December 29, 2015, Industrial and Commercial Bank of China Limited (ICBC) signed a buyer’s credit loan agreement worth $65,297,000 with the Government of Suriname's Ministry of Public Works for a 70 km Road Construction Project. The loan, which is captured via Project ID#55444, carried the following borrowing terms: a 14 year maturity, a 2.5 year grace period, an interest rate of 6-month LIBOR plus 350 basis points, a commitment fee of 1%, and a management fee of 1%. The proceeds of the loan were to be used by the borrower to partially finance of the cost of a commercial contract between the Government of Suriname and Dalian International Economic and Technical Cooperation Group (CDIG). The ICBC loan was also backed by a Sinosure credit insurance policy. In order pay for 85% of the cost of the Sinosure insurance policy (premium), the Government of Suriname contracted an additional $5.797 million loan on March 30, 2016 from China Dalian International Cooperation (Group) Holdings Ltd (captured via Project ID#92500). The $5.797 million loan carried a 5 year maturity and an interest rate of 6-month LIBOR plus 350 basis points. On the same day (March 30, 2016), the Government of Suriname signed a $3.126 million loan agreement with Zhong Da International Engineering Company (Suriname) N.V. — a wholly owned subsidiary of CDIG — for the 70 km Road Construction Project (captured via Project ID#95966). The loan carried a 5-month maturity (final maturity date: August 31, 2016) and an interest rate of 6-month LIBOR plus a 3.5% margin. The proceeds of the loan from Zhong Da International Engineering Company (Suriname) N.V. were to be used by the borrower to finance the advance/down payment portion of the commercial contract between CDIG and the Government of Suriname. The purpose of the project was to construct 70 kilometers of roads in Suriname, including a 8 km road to Matta, the Poerwojadieweg (Poerwodadiweg) road in Lelydorp, and Verlengde Jacques Gompertsstraat. CDIG was the contractor responsible for project implementation. Project implementation took place between July 2016 and September 2017.

Additional details

1. AidData estimates the “all-in” interest rate by adding a 3.50% margin to the average 6-month LIBOR rate in December 2015 (0.764%). 2. The China-Latin America Commercial Loans Tracker, which is produced by the Inter-American Dialogue, does not capture the ICBC loan that supported this project. 3. The Dutch project title is Dalian 70.

Number of official sources

4

Number of total sources

11