ICBC contributes $610 million to $843 million syndicated buyer’s credit for Phase 1 of CBD in New Administrative Capital Construction Project (Linked to Record ID#105508, 105509)

Project narrative

In 2014, Egyptian President el-Sisi proposed the construction of a New Administrative Capital (NAC) and identified this project as the ‘the locomotive of Egypt's future development.’ The project is part of a broader effort to switch Egypt’s capital city from Cairo to a brand-new constructed smart city called the NAC. The establishment of the NAC seeks to alleviate Greater Cairo’s increasing densification and establish a new growth hub for future generations. It will house Egypt’s 29 government ministries and contain 20 residential neighborhoods, an airport, hotels, malls, parks. Upon completion, it is projected to have enough space to accommodate 6.5 million inhabitants. On January 21, 2016, the Egyptian Government and China State Construction Engineering Corporation Ltd. (CSCEC) signed a general contracting framework agreement regarding a project to construct the Central Business District (CBD) of the NAC. Then, on October 11, 2017, at a launch ceremony for the NAC Project, Egyptian Minister of Housing, Public Facilities, and Urban Development, Mustafa Mabdili, signed a general (commercial) contract worth $3,000,000,000 for the construction of the Central Business District (CBD) of the NAC with the Vice President of CSCEC, Zheng Xuexuan. A revised commercial contract, worth $3.5 billion, was singed by CSCEC and Egypt’s Ministry of Investment and International Cooperation on September 2, 2018. The commercial contract specifies that CSCEC is responsible for the construction of 18 high-rise towers (including administrative offices, hotels, entertainment facilities, and the tallest tower in Africa). The project was organized into three batches (phases) and scheduled for financing via three separate loans (all of which reached financial close). On April 28, 2019, a consortium of Chinese state-owned banks signed a $843,000,000 syndicated (buyer’s credit) loan agreement with the New Urban Communities Authority (NUCA) — an Egyptian Government authority affiliated with the Ministry of Housing — for the first phase of the construction of the Central Business District (CBD) in the NAC. Participants in the loan syndicate include the Export-Import Bank of China (China Eximbank), the Industrial and Commercial Bank of China (ICBC), and Bank of China (BOC). ICBC was the lead arranger of the syndicated loan and it contributed 72.3% ($610 million). Then, in August 2019, NUCA signed a $1,363,979,718.11 syndicated (buyer’s credit) loan agreement with 8 banks (the Export-Import Bank of China, ICBC, BOC, China Minsheng Banking Corporation, China CITIC Bank, China Construction Bank, National Bank of Kuwait, and HSBC Bank Middle East Limited) for the second phase of the construction of the Central Business District (CBD) in the NAC. Then, on December 24, 2020, NUCA signed a $800,000,000 syndicated (buyer’s credit) loan agreement with ICBC, BOC, China Construction Bank, Postal Savings Bank of China, China CITIC Bank, and Bank of Communications for the third phase of the construction of the Central Business District (CBD) in the NAC. The borrower was to use the proceeds from the three loans to finance approximately 85% of the cost of the $3,500,000,000 commercial contract that was signed with CSCEC on September 2, 2018. The loans carried the following borrowing terms: a 13.5-year maturity, a 3-year grace period, and 2-3% interest rate. The Government of Egypt provided a sovereign guarantee in support of the loans. Sinosure provided $3.88 billion of buyer’s credit insurance (to cover the loan principal and interest). The Sinosure-covered project cashflow analysis reportedly accounted for projected apartment rental and sales, hotel & retail rentals, and centralized advertising revenues. The loan for phase one was originally scheduled to be disbursed in January 2020. However, on January 31, 2020, Al Monitor — an Egyptian newspaper — reported that it had not disbursed as expected in January 2020. According to the newspaper, the Egyptian government did not initially meet conditions attached to the loan (facility) agreement and the Chinese bank syndicate was concerned about whether the Egyptian government could repay the loan. The purpose of the project was to construct a 385.8-meter high “Iconic Tower” (Arabic: البرج الأيقوني‎), 12 high-rise commercial office buildings, 5 high-rise apartments (residential buildings), 4 hotels, and supporting municipal projects in the CBD, which is located 45 km east of Cairo in the center of Egypt’s NAC. Upon completion, the CBD was expected to cover 1,612,850 square meters and the “Iconic Tower” was expected to become Africa’s tallest building. The first phase of the project involved the construction of seven high-rise towers (5 residential and 2 commercial towers) in the CBD. The second phase of the project involved the construction of 20 commercial and residential buildings and supporting building complexes (with a gross floor area of 1,800,000 square meters). The scope of the third phase of the project is unknown. CSCEC’s Eighth Bureau was the EPC contractor responsible for project implementation and it reportedly provided direct employment opportunities for 16,000 workers and engineers (including 2,000 Egyptians and 4,000 Chinese), while indirectly employing 30,000 people. Dar al-Handasah Shair & Partners was responsible for architectural design and supervision. The project was originally scheduled to commenced on December 15, 2017 and conclude on March 31, 2021. Project implementation ultimately commenced on May 2, 2018. Then, on February 26, 2019, the foundation bottom slab concreting of the main building of the Iconic Tower was completed. In March 2020, the structural frame of the CO3 Office Building was completed and the first curtain wall body was installed for the C04 Tower (Commercial Building), which marked the beginning of the external curtain wall installation stage. Construction activities continued during the Covid-19 pandemic. On October 25, 2020, a topping-off ceremony was held for the 27-floor, C12 Tower (Commercial Building) Then, on June 17, 2021, a topping-off ceremony was held for the 385.8 meter, 80-storey Iconic Tower (which was planned and inspired by the shape of a pharaonic obelisk with glass exterior). CSCEC reported in 2021 that it had completed the construction of 13 buildings in the NAC, including the Iconic Tower (also known as the C03 Tower). As of September 2022, the project had completed the main construction of all 20 buildings and had entered the decoration and electromechanical installation stage. At that time, the project as a whole was expected to reach completion by the end of 2023. However, according to the terms of the commercial contract that was signed on October 11, 2017, the project was originally expected to reach completion within 43 months (by May 11, 2021). In May 2023, a 22KV substation in the Central Utility Complex (CUC) of the CGD was successfully energized. Then, on June 25, 2023, CSCEC Egypt signed a cooperation agreement with NUCA and INCOME Company regarding the ‘operation’ of the NAC CBD project.