China Eximbank provides $160.8 million preferential buyer’s credit for Phase 3 of National Telecommunication Coverage Project (Linked to Record ID#57477, #30497, #57529, and #68940)

Project narrative

On May 20, 2017, China Eximbank and the Government of the Republic of Congo signed a preferential buyer’s credit (PBC) agreement [China Eximbank PBC No. (2017) 20 Total No. (446)] worth $160,875,460.47 for Phase 3 of the National Telecommunication Coverage Project. The PBC carried the following terms: a maturity of 20 years, a grace period of 5 years, an interest rate of 2%, a default (penalty) interest rate of 0%, a management fee of 0.50%, and commitment fee of 0.50%. The borrower agreed to deposit project-related revenues in an escrow account to facilitate repayment. In 2017, China Eximbank and the Government of the Republic of Congo also signed an RMB 460 million government concessional loan (GCL) agreement for the same project. The GCL carries a maturity of 16 years. However, its interest rate and grace period are unknown. The proceeds of the PBC and the GCL were to be used by the borrower to finance a commercial contract (number 2015-031/PR/AS/DGGT) between the Government of the Republic of Congo and Huawei Technologies Co., Limited, which was signed on July 13, 2015. The purpose of Phase 3 is to extend the coverage of a fiber optic cable network to the entire country and strengthen the capacities of Congo-Telecom (the incumbent state-owned telecoms operator). More specifically, it involves the laying of fiber optic cable between Ouesso and Impfondo; connecting the administrative centers of the country’s districts; and ‘last kilometer’ fiber optic work to institutions, businesses and households. In April 2018, the Chinese Ambassador to the Republic of Congo, and the Congolese Minister of Planning, Equipment of the Territory met to discuss implementation. This project faced significant implementation delays due to a fall in oil prices, which in turn made it far more difficult for the Congolese authorities to meet their outstanding debt obligations to China Eximbank. However, after China Eximbank and the Congolese authorities signed a debt restructuring agreement in 2019, this project restarted. The PBC is captured in Record ID#57531. The GCL is captured in Record ID#68940.