China Eximbank provides RMB 249 million government concessional loan for National Broadband Expansion Project (Linked to Record ID#56033)

Project narrative

On September 22, 2018, the Chinese Government and the Government of Guyana signed a preferential loan framework agreement for the National Broadband Expansion Project. Then, on October 26, 2018, China Eximbank and the Government of Guyana signed an RMB 249,043,600 ($37.6 million) government concessional loan (GCL) agreement [CHINA EXIMBANK GCL NO. (2018) 26 TOTAL NO. (668)] for the National Broadband Expansion Project. The GCL carries the following borrowing terms: a 2% interest rate, a 0% default (penalty) interest rate, a 5-year grace period, a 20-year maturity period, a 0.25% commitment fee, and a 0.25% (RMB 622,609) management fee. The proceeds of the GCL are to be used by the borrower to finance a $37.6 million commercial (EPC) contract (ID# OY03281700000E) between the Ministry of Communications of Guyana and Huawei Technologies Co. Ltd, which was signed on November 6, 2017. As of December 31, 2020, the loan had achieved a 95.7% disbursement rate ($35,991,584 out of $37,600,000) and its total amount outstanding (including principal and capitalized interest) was RMB 243,549,000. The purpose of the project is to expand and upgrade the country’s existing e-government network in order to improve the efficacy of government services in four areas: (1) smart government solutions, (2) safe city solutions, (3) smart education, and (4) smart healthcare. The project also involves components that involved the construction of Long-term Evolution (LTE) towers, the equipping of a data center, the equipping of a unified emergency call center, the construction of a command center for the police keep track of patrol cars, an expansion of Closed Circuit Television (CCTV) monitoring, and training and human resource capacity building activities. The stated purpose of the “safe city" component of the project is to enable the Guyana Police Force to track license plates and other documents, improve response times, and access critical information in real time. Huawei Technologies Co. Ltd and Guyana’s National Data Management Authority are responsible for project implementation. The project commenced in November 2019. As of late 2019, the Safe City component of the project was ‘largely complete’. By December 31, 2020, the China Eximbank loan had achieved an 95.7% disbursement rate ($35,991,584.40 out of $37,600,000). This project has provoked local scrutiny and controversy due to the use of facial recognition technology in the smart city component and the possibility that Huawei would gain access to the Government of Guyana’s data systems. In November 2020, the Prime Minister of Guyana said that security concerns by the public had been heard and that measures would be put in place to guard against breaches, but he did not explain how this would be accomplished.