China Eximbank provides $299.2 million buyer’s credit loan for Phase 1 of the 66kV Malabo Power Grid Project (Linked to Record ID#484)

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. The subsidiary buyer's credit loans under the $2 billion 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 (also known as 赤道几内亚共和国财务预算部) 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 China into a payment reserve account (also 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. In 2009, China Eximbank and the Government of Equatorial Guinea signed a $299,208,139.74 subsidiary buyer’s credit loan agreement for Phase 1 of the 66kV Malabo Power Grid Project. The proceeds of the loan were to be used by the borrower to finance (i) an EUR 99.91 million commercial contract between Ministry of Energy and Mines of Equatorial Guinea and CMEC for the project's first phase, and (ii) a $221 million commercial contract (ID#CMEC2010C308) between Ministry of Energy and Mines of Equatorial Guinea and CMEC for the project's second phase. The loan disbursed $30,709,343.12 as of 2009, $156,723,636.42 as of 2010, $226,868,227.74 as of 2011, $228,868,227.74 as of 2012, $228,868,227.74 as of 2013, $228,868,227.74 as of 2014, $228,868,227.74 as of 2015, $228,868,227.74 as of 2016, and $228,868,227.74 as of 2017. Its principal amount outstanding was $30,709,343.12 in 2009, $156,723,636.42 in 2010, $226,868,227.74 in 2011, $214,526,688.99 in 2012, $118,628,722.97 in 2013, $29,910,092.71 in 2014, $11,873,944.88 in 2015, $500,000 in 2016, and $0 in 2017. The project involved the construction of a 66kV electricity transmission line between Malabo City and Sipopo and a 66/200 kV substation in Sipopo. CMEC was the general EPC contractor responsible for Phase 1 and Phase 2 implementation. The Changjiang Institute of Survey, Planning, Design, and Research was the contractor responsible for project design. Construction commenced on December 10, 2010 and 66kv power equipment arrived in Malabo on February 12, 2011. Construction ended on May 21, 2011 and a formal project completion ceremony took place on June 4, 2012. Record ID #62264 captures Phase II of the 66kV Malabo Power Grid Project