CDB provides RMB 1.9 billion via Tranche B of oil-backed loan facility (Linked to Project ID#36002)

On December 20, 2012, China Development Bank and the Government of Ecuador signed a $2 billion loan facility agreement. The CDB loan is backed by the sale of crude oil and fuel oil from Petroecuador to PetroChina International and UNIPEC Asia Co. Ltd. Petroecuador signed an Oil Sales and Purchase Contract with PetroChina International on December 20, 2012. Petroecuador also signed an Oil Sales and Purchase Contract with UNIPEC Asia Co. Ltd. on December 20, 2012. The loan facility consists of two components: Tranche A ($1.7 billion) and Tranche B (RMB 1.9 billion. Project ID#36002 captures Tranche A. Project ID#58827 captures Tranche B. Tranche A was designed to address the Government of Ecuador's 2013 budget deficit. It was provided on the following terms: 8 year maturity, 2 year grace period, and 7.1917% interest. Tranche B was provided on the following terms: 8 year maturity, 2 year grace period, and 6.8717% interest. A $1.4 billion component of Tranche A was received by the Government of Ecuador during the first several months of 2013 and it was 'used to restore Ecuador’s International Reserves.'

Additional details

1. This transaction was governed by a Facility Agreement between CDB and the Ecuadorian Ministry of Finance that was signed on December 20, 2012 and by a Five Party Agreement (between CDB, PetroChina International, UNIPEC Asia Co. Ltd., Ecuador's Ministry of Finance, and PetroEcuador) that was signed on September 6, 2012. The Five Party Agreement links the Facility Agreement to an Oil Sales and Purchase Contract between PetroEcuador and PetroChina International and an Oil Sales and Purchase Contract between PetroEcuador and UNIPEC Asia Co. Ltd. The Oil Sales and Purchase Contract that Petroecuador signed with PetroChina International on December 20, 2012 can be accessed in its entirety via https://www.dropbox.com/s/nmz5jx1cbucyzh7/Petroecuador%20Oil%20Sales%20and%20Purchase%20Contract%20with%20PetroChina%202012.pdf?dl=0. The Oil Sales and Purchase Contract that Petroecuador signed with UNIPEC Asia Co. Ltd. on December 20, 2012 can be accessed in its entirety via https://www.dropbox.com/s/wkk7by6ublkwah3/Petroecuador%20Oil%20Sales%20and%20Purchase%20Contract%20with%20UNIPEC%20Asia%202012.pdf?dl=0. 2. From 2010 to 2016, the Government of Ecuador entered into four separate loan agreements with China Development Bank totaling $7 billion which are related to a multi-party contractual structure that involves crude oil delivery contracts entered into with PetroChina and Unipec. Deliveries under these contracts are based upon international spot prices, such as WTI plus or minus a spread, plus a premium paid due to the term of the contracts. The spread is calculated using Argus, a crude oil price assessment publication (“Argus”) and the quality of crude oil as measured by the American Petroleum Institute. Under these agreements, Ecuador is required to invest the loaned amounts in specific infrastructure projects or programs in Ecuador. The $1 billion loan agreement with CDB in 2010 is captured via Project ID#35865. The $2 billion loan agreement with CDB in 2011 is captured via Project ID#69319 and ID#69320. The $2 billion loan agreement with CDB in 2012 is captured via Project ID#36002, and#58827. The $2 billion loan agreement with CDB in 2016 is captured via Project ID#58839 and Project ID#58842. 3. The Ecuadorian Ministry of Finance loan identification number is 23167000 for the $1.4 billion component of Tranche A, 23167001 for the $300 million component of Tranche A, and 23167002 for the RMB 1.9 billion tranche (Tranche B).

Number of official sources

6

Number of total sources

12