China Eximbank provides EUR 78.3 million buyer’s credit loan for SIPOPO International Convention Center Construction 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 2008, China Eximbank and the Government of Equatorial Guinea signed a subsidiary buyer’s credit loan agreement for Malabo Convention Center Construction Project. The face value of this loan is unknown. The proceeds of the loan were used to partially finance an EUR 92,179,004 (approximately US$118 million) commercial contract with China State Construction Engineering Corporation (CSCEC), which was signed on November 15, 2008. This project involved the construction of the SIPOPO International Convention Centre, which is located approximately 30 km from downtown Malabo. This 4-storey building is 24 meters high and it occupies an area of 120,000 square meters. It was originally commissioned for the purpose of hosting the 2011 African Union Heads of State Summit, but it hosted 47 international conferences between June 2011 and October 2018. The glass-encased avant-garde structure was designed by a Turkish architecture firm and built to filter in external light without overheating, while still providing stunning views of the Malabo oceanfront. The convention center — which has been shortlisted for international architecture prizes — is part of Sipopo, a city of mansions built near Malabo by the Obiang regime. CSCEC was the contractor responsible for implementation. Construction began in January 2011, and 220 local workers were employed to support the project. The project was completed on June 23, 2011.