China Eximbank provides $198.24 preferential buyer's credit for First Phase of Yachay City of Knowledge Project (Linked to Record ID#39113)

Project narrative

On February 25, 2016, China Eximbank and Ecuador's Ministry of Finance signed a $198,244,300 preferential buyer’s credit (PBC) agreement for the First Phase of the Yachay City of Knowledge Project. The loan carries the following borrowing terms: a 3% interest rate, a 5 year grace period, and a maturity of 20 years. The borrower was expected to use the proceeds of the loan to partially finance a commercial contract with China Gezhouba Group Corporation (CGGC), which was signed in November 2015. The Central Bank of Ecuador was also required to open and maintain a minimum cash balance in an escrow account ("cuenta de depósito") in China Eximbank as a source of security for the PBC. The loan’s (principal) outstanding amount was $121,448,037.34 as of December 31, 2021 and $113,072,310.66 as of November 30, 2022. The first phase of the Yachay City of Knowledge Project primarily involved the provision of equipment and the installation of electricity and telecommunications infrastructure. The project site is an 18-square mile planned community expected to house technology and innovation parks in addition to Yachay Tech University, which opened in 2014 with an initial 187 students. CGGC was the contractor responsible for project implementation. Construction began in July 2012 and Phase 1 was originally expected to take 28 months to complete (December 2014). The project as a whole, including all of its phases, was expected to reach completion within 10 years. The goal of Yachay is to create a culture of scientific research in Ecuador and promote a long-term state of the art site for technological research. Developers also indicated that there would be an emphasis on nanotechnology. Long-term goals included the development of knowledge-based products to diversify the Ecuadorian economy and the development of new technologies for the country's well-being. The Yachay project faced many setbacks during implementation. President Lenin Moreno said there were structural and issues associated with the project. One major problem reported by the comptroller was the creation of buildings before sewerage systems were installed.