China Eximbank provides $484.6 million buyer's credit loan for 500KV & 230KV Transformation Lines and Substations Project (Linked to Record ID#38935, #35818, #91361, #96293)

Project narrative

On October 29, 2014, China Eximbank and the Government of Ecuador’s Ministry of Finance signed a $509,232,822.65 buyer's credit loan (BCL) agreement [Contract No. 1410302052014211795] for the 500KV & 230KV Transformation Lines and Substations Project. The face value of the BCL was subsequently downsized to $484,668,867.74. The BCL carried the following borrowing terms: a variable interest rate of 6-month LIBOR plus a 4.2% margin, a 3 year grace period, a 15 year maturity, a 0.75% commitment fee, a 0.75% management fee ($3,819,246.62), a 1.5% default (penalty) interest rate, and a 7.01% Sinosure insurance premium. The borrower was responsible for making 24, equal, semi-annual principal payments to the lender (on March 21 and September 21 of each year). The proceeds of the BCL were to be used by the borrower to finance 85% of the cost of a $599,097,509 commercial contract [ID# 035-2013] between Harbin Electric Company Limited and the Corporación Eléctrica del Ecuador (CELEC E.P.), which was signed on July 26, 2013. $203,515,143.67 had been disbursed through the BCL as of July 2018. The borrower made principal repayments worth $19,650,637.58 on September 21, 2018, $20,796,995.20 on March 21, 2019, $21,153,392.14 on September 21, 2019, $21,153,392.14 on March 21, 2020, and $25,119,653.17 on March 21, 2022. It did not make any principal repayments on the originally scheduled repayment dates of September 21, 2020, March 21, 2021, September 21, 2021, and September 21, 2022. The loan’s (principal) amount outstanding was $465,018,230.16 as of September 21, 2018, $444,221,234.96 as of March 21, 2019, $423,067,842.82 as of September 21, 2019, $401,914,450.68 as of March 21, 2020, $401,914,450.68 as of September 21, 2020, $401,914,450.68 as of March 21, 2021, $401,914,450.68 as of September 21, 2021, $401,914,450.68 as of December 31, 2021, $376,794,797.51 as of March 21, 2022, $376,794,797.51 as of September 21, 2022, and $376,794,797.51 as of November 30, 2022. The purpose of the project was to evacuate electricity from the Coca Codo Sinclair hydroelectric power plant and the Sopladora hydroelectric power plant, both of which were constructed with financial support from China Eximbank (captured via Record ID#38935 and Record ID#35818). The project had four objectives: (1) construction of a 500kV transmission line that runs from the Coca Codo Sinclair substation to the San Rafael substation and the El Inga substation in Quito within Pichincha province; (2) construction of a 500kV transmission line that runs from the Chorrillos substation (in Guayaquil within Guayas province) to the Tisaleo substation (in Tungurahua province) and the El Inga substation in Quito; (3) construction of a 230kV transmission line that runs from the Blower substation to the Taday substation and the Taura substation; and (4) construction of a 230kV transmission line that runs from the San Rafael substation to the Jivino substation and the Shushufindi substation. Harbin Electric Company Limited was the EPC contractor responsible for implementation. Project implementation commenced in 2013 but was temporarily halted in May 2016. During the project’s peak construction period, it generated 4,200 local jobs. The project was officially completed on June 13, 2019. A temporary project handover certificate was issued on November 22, 2019. A final project handover certificate was issued on November 20, 2020. However, the China Eximbank loan (BCL) that supported this project has underperformed. It was rescheduled twice — once in September 2020 (as captured via Record ID#91361) and again in September 2022 (as captured via Record ID#96293).