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Overview

Industrial and Commercial Bank of China contributes $200 million to syndicated loan for Nacala Corridor Railway and Port Project

Commitments (Constant USD, 2023)$212,825,276
Commitment Year•2017Country of Activity•MozambiqueDirect Recipient Country of Incorporation•MozambiqueSector•Transport And StorageFlow Type•Loan

Status

Project lifecycle

Implementation

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Nov 1, 2017
Start (actual)
May 12, 2017
Last repayment
Oct 29, 2031

Geospatial footprint

Map overview

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The purpose of the project is to construct the railway and port infrastructure that is needed to transport and export coal produced from the Moatize coal mine in Mozambique. It involves the construction of a 912 km railway that connects the Moatize coal mine developed by Vale S.A. and Mitsui & Co, Ltd. in Tete to the port of Nacala through part of Malawi. The railway has three sections: (1) the Nacala-to-Velha section that connects the village of Andre Mossuril to the town of Nacala-a-Velha; (2) the Lumbo section that connects the city of Monapo to the port village of Lumbo; and (3) the Cuamba-Lichinga section that connects the town of Cuamba to the city of Lichinga. The project also involves the construction of an export terminal and a coal storage yard at the port of Nacala-a-Velha. More detailed locational information can be found at: https://www.openstreetmap.org/way/325196105 and https://www.openstreetmap.org/way/192528821#map=14/-16.1649/33.8205.

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Funding agencies

State-owned Commercial Banks

  • Industrial and Commercial Bank of China (ICBC)

Cofinancing agencies

Intergovernmental Organizations

  • African Development Bank (AfDB) (ADB) (BAD)

Private Sector

  • Mizuho Bank, Ltd.

State-owned Banks

  • Japan Bank for International Corporation (JBIC)

Receiving agencies

Joint Venture/Special Purpose Vehicles

  • Corredor Logístico Integrado De Nacala SA

Implementing agencies

Joint Venture/Special Purpose Vehicles

  • Corredor Logístico Integrado De Nacala SA

State-owned companies

  • China Communications Construction Co., Ltd. (CCCC)

Loan desecription

ICBC contributions to USD 2.73 billion syndicated loan for Nacala Corridor Railway and Port Project

Grant element•28.6416%Interest rate (t₀)•3.47979%Interest type•Variable Interest RateMaturity•14 years

Narrative

Full Description

Project narrative

In November 2017, a group of banks provided a syndicated loan of $2.73 billion to Corredor Logístico Integrado De Nacala SA — a project company and special purpose vehicle owned by Vale (85% equity stake) and Mitsui (15% equity stake) — for the Nacala Corridor Railway and Port Project. This loan carries a maturity of 14 years and an interest rate of LIBOR plus 190 basis points. The interest rate is calculated using the average 6-month LIBOR of 1.626% from November 2017 plus 190 basis points = 3.526%. The Industrial and Commercial Bank of China (ICBC) reportedly contributed $200 million to this loan syndicate. Other funders were Mizuho Bank, Ltd., the Japan Bank for International Cooperation (JBIC), African Development Bank and other eight private financial institutions. The purpose of the project is to construct the railway and port infrastructure that is needed to transport and export coal produced from the Moatize coal mine in Mozambique. It involves the construction of a 912 km railway that connects the Moatize coal mine developed by Vale S.A. and Mitsui & Co, Ltd. in Tete to the port of Nacala through part of Malawi. The railway has three sections: (1) the Nacala-to-Velha section that connects the village of Andre Mossuril to the town of Nacala-a-Velha; (2) the Lumbo section that connects the city of Monapo to the port village of Lumbo; and (3) the Cuamba-Lichinga section that connects the town of Cuamba to the city of Lichinga. The project also involves the construction of an export terminal and a coal storage yard at the port of Nacala-a-Velha. Upon completion, the project will facilitate rail and ship transport of produced coal up to a volume of 18 million tons per annum. China Communications Construction Group Ltd. was one of the contractors involved in that implementation of this project. A groundbreaking ceremony for this project took place on May 12, 2017. On Janurary 20th, 2021, Mitsui & Co decided to sell its equity stake to Vale.

Staff comments

1. The Portuguese project title is Projecto do Corredor Logístico Integrado de Nacala. The Chinese project title is 纳卡拉物流走廊项目. 2. The $2.73 billion loan agreement was signed in November 2017 by and between the Japanese Mizuho Bank, Ltd. alongside the Japan Bank for International Cooperation, the African Development Bank, and 9 other private financial institutions and the four project companies established in Mozambique and Malawi by Vale S.A. and Mitsui & Coi, Ltd. in connection with project finance loans in the total amount of $2.73 billion.