Bank of China provides $77.35 million buyer’s credit loan for Phase 1 of National Telecommunications Backbone Project (PBNT)

Project narrative

On June 20, 2019, the Shenzhen Branch of Bank of China and the Government of Burkina Faso signed a $77.35 million buyer's credit loan agreement for Phase 1 of the National Telecommunications Backbone Project (PBNT). Then, on October 2, 2019, the Government of Burkina Faso authorized the ratification of the credit agreement. The loan carries the following borrowing terms: a 12-year maturity, a 3-year grace period, an interest rate of 6-month LIBOR plus a 2.5% margin, a management fee of 4%, a commitment fee of 0.8%. The loan is also backed by a Sinosure buyer’s credit insurance policy. The total cost of the buyer's credit insurance premium $6,843,413.73. Bank of China reportedly agreed to provide 60% of the funding needed for the first phase of PBNT while the other 40% would be provided by BNP Paribas. However, on October 8, 2019, the BNP Paribas announced that it was no longer involved in this project. The borrower was expected to use the proceeds of the Bank of China loan to partially finance a commercial contract that it signed with Huawei Technologies Co., Ltd. in July 2014. The purpose of the project is to construct a 307-kilometer fiber optic network linking the capital Ouagadougou and the city of Po, near the Ghanaian border. This fiber optic ‘backbone’ will have a capacity of 1,600 gigabits per second and will ten municipalities. It is parter of a larger, EUR 175 million program to provide 5,740 km of fiber optic coverage in Burkina Faso, at a cost of 175 million euros. Construction began on December 10, 2017. Phase 1 was completed and officially inaugurated on October 26, 2021.