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Overview

China Eximbank provides EUR 138.9 million buyer’s credit loan for Bata University Campus Construction Project

Commitments (Constant USD, 2023)$161,521,104
Commitment Year•2019Country of Activity•Equatorial GuineaDirect Recipient Country of Incorporation•Equatorial GuineaSector•EducationFlow Type•Loan

Status

Project lifecycle

Implementation

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Jun 30, 2019
Start (actual)
Jun 4, 2014
First repayment (originally scheduled)
Jun 29, 2022
Last repayment (originally scheduled)
Jun 26, 2032

Geospatial footprint

Map overview

Visualizes the AidData-provided feature geometry for this project.

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The purpose of this project was to fund the university campus construction in Bata, Equatorial Guinea. More detailed locational information can be found at: https://www.openstreetmap.org/relation/12718967

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

  • Export-Import Bank of China (China Eximbank)

Receiving agencies

Government Agencies

  • Government of Equatorial Guinea

Implementing agencies

State-owned companies

  • China State Construction Engineering Corporation (CSCEC)

Loan desecription

China Eximbank provides EUR 138.9 million buyer’s credit loan for Bata University Campus Construction Project

Grace period•3 yearsGrant element•37.2286%Interest rate (t₀)•2.689%Interest type•Variable Interest RateLoan tenor•6-month rateMaturity•13 years

Collateral

Subsidiary buyer's credits (loans) under a $2 billion master (buyer's credit) facility were secured with (i.e. collateralized against) minimum cash balances in an escrow account opened by Government of Equatorial Guinea in China Eximbank. Under the original terms of an Account Settlement and Financing Agreement (Convenio de Liquidacion de cuentas y Financiamiento) that the parties signed on February 17, 2006, the minimum cash balance requirement was reportedly equivalent to 30 percent of the Government of Equatorial Guinea's outstanding stock of debt to China Eximbank. After the Account Settlement and Financing Agreement was amended on March 26, 2010, the borrower was expected -- at any given point in time -- to maintain a minimum cash balance in the escrow account equivalent to the value of its next set of semi-annual principal, interest, and fee payment obligations to the lender. The borrower was also expected to deposit the cash proceeds from its oil export sales (crude oil sales revenue) to Chinese importers (under one or more offtake agreements) into a payment reserve account (known as 还款准备金 or 赤道几内亚共和国财务预算部还款准备金). More specifically, the borrower was expected to deposit the cash proceeds from six oil cargoes into the payment reserve account. As of January 2020, Equatorial Guinea's Ministry of Finance was expected to maintain a minimum cash balance of $58,416,671.63 in its escrow account with China Eximbank (an amount equivalent to the next semi-annual installment of principal, interest, and fees due to China Eximbank in July 2020). The actual cash balance of the escrow account was $100,698,988 as of December 31, 2017, $85.725,355.79 as of March 31, 2018, $149,825,137 as of April 30, 2018, $157,600,000 as of June 30, 2018, $75,923,212.60 as of July 31, 2018, $220,890,603.40 as of September 30, 2018, $241,848,587.20 as of December 31, 2019, and $39,223,380.18 as of February 13, 2020. The cash balance of the payment reserve account was $478,423,556 as of December 31, 2017, $478,423,556.50 as of March 31, 2018, $478,423,556.50 as of April 30, 2018, $478,423,556.50 as of June 30, 2018, $478,423,556.50 as of July 31, 2018, $478,423,556.50 as of September 30, 2018, $475,537,571.28 as of December 21, 2019, and $483,516,774 as of December 31, 2019.

Narrative

Full Description

Project narrative

On November 16, 2006, China Eximbank and the Government of Equatorial Guinea signed a $2 billion buyer’s credit facility agreement (互惠贷款) for various infrastructure projects. All subsidiary loans approved under this buyer’s credit facility agreement carry the following terms: a 5.5% interest rate, a 5 year maturity, a 2 year grace period, a 0.375% commitment fee, and a 0.5% risk guarantee (garantia del riesgo) cost. In 2013, China Eximbank and the Government of Equatorial Guinea expected to sign a subsidiary buyer’s credit loan agreement for the Bata University Campus Construction Project. The proceeds of the loan were expected to be used by the borrower to finance a $239 million (or 120 billion CFA) commercial contract with China State Construction Engineering Corporation (CSCEC), which was signed on June 4, 2013. However, on February 15, 2018, the Government of Equatorial Guinea and China State Construction Engineering Corporation Ltd. signed a revised commercial contract worth EUR 182,938,821 for the Bata University Campus Construction Project. Then, in June 2019, the Government of Equatorial Guinea and China Eximbank signed an EUR 138,941,256.72 loan agreement for the Bata University Campus Construction Project. The borrowing terms of the Sinosure-backed loan included a 13 year maturity, a 3 year grace period, an annual interest rate of 6-month EURIBOR plus a 3% margin, a 2% default interest rate, a 0.5% commitment fee, and a 0.5% management fee. The borrower was expected to use the loan proceeds to finance (a) 70% of the cost of an EUR 182,938,821 commercial contract between the Republic of Equatorial Guinea (represented by the Ministry of Public Works, Housing and Urban Planning, the Ministry of Finance, Economy and Planning, and Oficina Nacional de Planificacion y Seguimiento de Proyectos) and China State Construction Engineering Corporation Ltd., which was signed on February 15, 2018; and (b) 85% of the EUR 12,804,802.38 cost of a Sinosure insurance premium. The project involves the construction of the Bata campus of the Universidad Nacional de Guinea Ecuatorial (UNGE). The campus is designed to can accommodate 4000 students and 400 faculty. China State Construction Engineering Corporation Ltd. is the EPC contractor responsible for project implementation. Construction began on or around June 4, 2014. As of July 2018, construction was still ongoing. By 2019, the project had only achieved a 30% completion rate.

Staff comments

1. The Chinese project title is 和巴塔大学 or 巴塔大学项目. The Spanish project title is El Proyecto de Campus Universitario de Bata. 2. The China Eximbank loan that supported Bata University Campus Construction Project is not included in the database of Chinese loan commitments that SAIS-CARI released in July 2020. 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. 3. A draft, English language version of the China Eximbank loan agreement can be accessed in its entirety via https://www.dropbox.com/scl/fi/2o498fald2sb6hgidmt98/Loan-Agreement-EG-Bata-University-for-MoF-review-20190627.pdf?rlkey=0m4276mv0q56zyomfxqz2zrul&dl=0. A draft, Spanish language version of the China Eximbank loan agreement can be accessed in its entirety via https://www.dropbox.com/scl/fi/qr73ycyidn77zt2gy0b2k/Equatorial-Guinea-2019-China-Eximbank-Loan-Agreement-for-the-Bata-University-Construction-Project-Spanish.pdf?rlkey=prsh8rjfxgtsclzlvoddhhwa8&dl=0 4. Official correspondence between China Eximbank and Equatorial Guinea's Ministry of Finance in June 2019 can be accessed via https://www.dropbox.com/scl/fi/n8xchups0k48mmpslaare/Re-Comments-on-the-loan-agreement-of-Bata-University-Project.pdf?rlkey=pji4cag384b3lg867zp9tax8v&dl=0 5. AidData has estimated the loan's all-in interest rate (2.721%) -- at the time it was issued -- by adding 3% to average 6-month EURIBOR in June 2019 (-0.279%). 6. Official correspondence between Sinosure and Equatorial Guinea's Ministry of Finance in June 2019 can be accessed via https://www.dropbox.com/scl/fi/c6rpoiahjootoxkhv0bsg/RV-Letter-from-China-Export-Credit-Insurance-Coporation-Sinosure.pdf?rlkey=gfp2s0s8auc90n1nrxer9tkri&dl=0 and https://www.dropbox.com/scl/fi/jo2cr9ge8l90er80jwzon/Letter-from-SINOSURE.pdf?rlkey=ujf89lytnp8r943cpsdn62576&dl=0 7. The loan's (ex ante) amortization table can be accessed via https://www.dropbox.com/scl/fi/54215s0gylruzgusqkc5n/EFECTO_FISCAL_DE_UN_PRESTAMO_DE_138.pdf?rlkey=8d8luc55qmpgrplajc1e0uotd&dl=0