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Overview

CDB provides $25 million loan to Development Bank of Ethiopia for on-lending to SMEs

Commitments (Constant USD, 2023)$25,849,282
Commitment Year•2013Country of Activity•EthiopiaDirect Recipient Country of Incorporation•EthiopiaSector•Banking And Financial ServicesFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Jan 11, 2013
First repayment
Nov 20, 2015
Last repayment
May 20, 2022

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Ultimate beneficial owners

At least 25% host country ownership

Funding agencies

State-owned Policy Banks

  • China Development Bank (CDB)

Receiving agencies

State-owned Banks

  • Development Bank of Ethiopia (DBE)

Implementing agencies

State-owned Banks

  • Development Bank of Ethiopia (DBE)

Loan desecription

CDB provides $25 million loan to Development Bank of Ethiopia for on-lending to SMEs

Grace period•2.86 yearsGrant element•29.434%Interest rate (t₀)•3.096%Interest type•Variable Interest RateLoan tenor•6-month rateMaturity•9.36 years

Narrative

Full Description

Project narrative

On January 11, 2013, China Development Bank signed a $25 million 'special loan facility' agreement with the Development Bank of Ethiopia to support small and medium sized enterprise (SME) development. The borrowing terms were as follows: a 9.36 year maturity, a 2.86 year grace period, and an annual interest rate of 6-month LIBOR plus a 2.6% margin. The loan's first and last scheduled principal payment dates were November 20, 2015 and May 20, 2022, respectively. Its first and last scheduled interest payment dates were May 20, 2013 and May 20, 2022, respectively. The borrower was responsible for repaying the loan in semi-annual installments between November 2015 and May 2022. Although the loan reached maturity in 2022, it is unclear if the borrower met all of its repayment obligations by the time the loan reached maturity.

Staff comments

1. The proceeds of this loan were mostly likely on-lent by the Development Bank of Ethiopia to SMEs. 2. AidData has estimated the loan's all-in interest rate (3.089%) at the time that it was issued -- by adding 2.6% to average 6-month LIBOR in January 2013 (0.489%). 3. The loan identification number in the Government of Ethiopia’s Debt Management and Financial Analysis System (DMFAS) is 20835000 and the corresponding project name in DMFAS is ‘SPEClAL FACILITY AGREMENT -DBE’. See https://www.dropbox.com/scl/fi/7nrczfanixvivmiyzqx3i/MOFED-Loan-Level-Data-on-Borrowing-Terms-and-Loan-Performance-September-2024_OTHER_PUBLIC.xlsx?rlkey=5sqhh9ii4t3x8cmz0jf6s7cod&dl=0 4. DMFAS identifies the loan commitment date as December 19, 2012 rather than January 11, 2013. This issue warrants further investigation. See https://www.dropbox.com/scl/fi/7nrczfanixvivmiyzqx3i/MOFED-Loan-Level-Data-on-Borrowing-Terms-and-Loan-Performance-September-2024_OTHER_PUBLIC.xlsx?rlkey=5sqhh9ii4t3x8cmz0jf6s7cod&dl=0 5. As of September 2024, the Government of Ethiopia recorded the loan's all-in interest rate as 4.58% in DMFAS. See https://www.dropbox.com/scl/fi/7nrczfanixvivmiyzqx3i/MOFED-Loan-Level-Data-on-Borrowing-Terms-and-Loan-Performance-September-2024_OTHER_PUBLIC.xlsx?rlkey=5sqhh9ii4t3x8cmz0jf6s7cod&dl=0