China Development Bank contributes to $660 million syndicated loan for Siem Reap Angkor International Airport Construction Project (Linked to Record ID#66058, #100606, #100607, #100608, and #100609)

Project narrative

On September 19, 2016, a special purpose vehicle called Angkor International Airport Investment (Cambodia) Co., Ltd. [吴哥国际机场投资（柬埔寨）有限公司] — that is jointly owned by Yunnan Investment Group, Yunnan Overseas Investment, and Yunnan Airport Group Co., Ltd. — was officially registered. Then, in 2021, a group of Chinese state-owned banks provided a $660 million syndicated loan to Angkor International Airport Investment (Cambodia) Co., Ltd. for the Siem Reap Angkor International Airport Project. The lenders were China Development Bank (as the Arranger, the Agent, and the Leading Bank); Yunnan Branch of Export-Import Bank of China (as the Joint Lead Bank); China Construction Bank (as a Participant Bank); Phnom Penh Branch of Bank of China (as a Participant Bank); and Phnom Penh Branch of Industrial and Commercial Bank of China (as a Participant Bank). China Development Bank Yunnan Branch conducted multi-party communications with the Cambodian Government, enterprises, and financial institutions, and took the lead in setting up a $660 million syndicated loan to support the construction of the airport. The maturity of the loan is 20 years. The total project cost is $880 million and it is being financed according to a debt-to-equity ratio of 75:25. Yunnan Investment Group made a $220 million equity investment in this project (see Record ID#66058). The borrower purchased a credit insurance policy from Sinosure. The purpose of the project is to construct a Level-4E airport in the Teuk Laak commune within the Toul Kork district, including an airstrip, 50,000 square meters terminal building, and supporting facilities like a 24.5 km airport road. Siem Reap Angkor International Airport is 40 km away from Angkor Wat and 51 km away from Siem Reap urban area, and the airport project covers an area of 700 hectares and another 1000 hectares of comprehensive development land. Upon completion, the new airport is expected to be able to handle 7 million passengers annually. The existing Angkor International Airport in Siem Reap is only 5 kilometers away from Angkor Wat (a Buddhist temple and the largest religious monument in the world) and has only one runway. As the existing airport is too close to Angkor Wat, the vibration generated by the take-off and landing of aircraft could damage the foundation of the Buddhist temple, and the airport’s throughput capacity cannot meet the rapid development of tourism. The Siem Reap Angkor International Airport Construction Project is being implemented on a build-operate-transfer (BOT) basis. Angkor International Airport Investment (Cambodia) Co., Ltd. was granted a 55-year concession to construct and operate the airport and it will be handed over to the Cambodian Government after the end of this period. Angkor International Airport Investment (Cambodia) Co., Ltd., in turn, hired Shanxi Mechanization Construction Group to assist with project implementation activities. Construction began on March 15, 2020. However, project implementation was halted for an unidentified reason in 2020 (most likely the Covid-19 pandemic). However, in a meeting with H.E. Mao Havannall, Minister in charge of State Secretariat of Civil Aviation (SSCA) in Phnom Penh on May 11, 2020, Mr. Lu Wei, Chairman of Angkor International Airport Investment (Cambodia) Co., Ltd., said that the on-site work had resumed. Then, a Memorandum of Understanding (MOU) on the construction of the Angkor International Airport Project was signed June 4, 2020. By May 2021, the project had achieved a 42% completion rate. An initial loan disbursement of $60 million was also released in 2021. 70% completion was reached at the end of 2022. The Siem Reap Angkor International Airport Construction Project was originally scheduled for completion on March 14, 2023. The project was completed on July 25th, 2023 and officially opened to air traffic on October 16, 2023. Record ID#100606 captures the estimated financial commitment of Industrial and Commercial Bank of China (ICBC). Record ID#100607 captures the estimated financial commitment of Export-Import Bank of China (China Eximbank). Record ID#100609 captures the estimated financial commitment of China Construction Bank Corporation (CCB). Record ID#100608 captures the estimated financial commitment of Bank of China.