China Eximbank provides $42.5 million loan — via EPC+F arrangement — for Skylight Hotel Construction Project

In August 2014, AVIC Engineering Corporation and Ethiopian Airlines signed a $65 million Engineering, Procurement, Construction (EPC) contract for the Skylight Hotel Construction Project. China Eximbank and AVIC Engineering Corporation subsequently signed a $42,250,000 Engineering, Procurement, Construction and Financing (EPC+F) agreement for the Skylight Hotel Construction Project. The borrowing terms of the financing (loan) agreement are unknown. However, it is known that the borrower was expected to use the loan proceeds to finance 65% of the cost of the $65 million commercial (EPC) contract that AVIC Engineering Corporation and Ethiopian Airlines signed in August 2014. The purpose of the project was to construct a five-star hotel (called the Skylight Hotel) that is adjacent to Bole International Airport of Addis Ababa. The hotel is situated on about 40,000 square meters. It has 373 guest rooms, three restaurants (including the biggest Chinese restaurant in Ethiopia at 900m2, and a 900m2 traditional Ethiopian restaurant), and three lounge bars. The Grand Ballroom is designed to host 2,000 guests at once, making it the largest ballroom in Ethiopia. The hotel offers five function rooms of varying capacity, fitness centre, outdoor heated swimming pool, mini golf & driving range, a 600m2 exhibition centre, boutique shop, ticket office, and other amenities. AVIC Engineering Corporation was the EPC contractor responsible for project implementation. Construction began in September 2015. By January 2017, the project had achieved a 40% completion rate. The hotel was officially inaugurated on January 27, 2019 and expected to generate over 400 jobs. Grand Skylight Hotels Management Company (GSHM), a wholly-owned subsidiary of the Aviation Industry Corporation of China (AVIC), is responsible for the management of the hotel.

Additional details

1. This project is also known as the Ethiopian Airlines Hotel Project. The Chinese project title is 埃塞俄比亚航空公司五星级酒店项目 or 埃航格兰云天酒店. 2. Under most EPC+F contractual arrangements, a loan is extended to the EPC contractor but with a sovereign guarantee from the host government. Therefore, AidData assumes that the loan issued to AVIC Engineering Corporation is backed by a repayment guarantee from the Government of Ethiopia (i.e. a sovereign guarantee). 3. This China Eximbank loan is not included in the database of Chinese loan commitments that SAIS-CARI released in 2020 and re-released in 2021. Nor is it included it in the China’s Overseas Development Finance Dataset that Boston University's Global Development Policy Center published in December 2020. 4. Grand Skylight Hotels Management Company (GSHM) is a wholly-owned subsidiary of AVIC with a registered capital of 298 million yuan. The company started its business in 1985 from Shenzhen Shanghai Hotel and has more than 30 years' experience in hotel planning, construction consultancy and operations management. On August 2, 2016, Grand Skylight Hotels Management and Ethiopian Airlines successfully signed a technical service contract for the Skylight Hotel Construction Project (Ethiopian Airlines Hotel Project).

Number of official sources

9

Number of total sources

16