China Eximbank provides $647.2 million buyer’s credit loan for Djibloho Power Transmission and Transformation Project (Linked to Record ID#995, #62127, #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 2011, China Eximbank and the Government of Equatorial Guinea signed a $647,219,106.90 subsidiary buyer’s credit loan agreement for the Djibloho Power Transmission and Transformation Project. The proceeds of the loan were used by the borrower to finance a $647,219,106.90 commercial (EPC) contract with China Machinery Engineering Corporation (CMEC). The purpose of the project was to evacuate power from the China Eximbank-financed 120MW Djibloho Hydropower Station (captured via Record ID#995) to 25 cities in mainland Equatorial Guinea. It involved the construction of 1,366 km of power transmission lines; the construction of twenty-six, 5200 kV, 13110kV, and 820kV substations; and the construction of 1 national control (dispatch) center. CMEC and one of its subsidiaries (CMEC Comtrans International Co., Ltd.) were responsible for implementation. A groundbreaking ceremony for the project was held on June 21, 2009. Another major milestone was achieved on December 28, 2011 when the South Akure Sub-station and Mengomeyén Sub-station achieved synchronized power transmission. A project completion ceremony was held on October 10, 2012.