China Eximbank signs MoU for Cambodian Rice Production and Rice Export Promotion Project (linked to Record ID#86428, #86427)

Project narrative

On November 13, 2017, China Eximbank signed a Memorandum of Understanding (MoU) agreement pledging to provide a concessional loan for the Cambodian Rice Production and Rice Export Promotion Project, also known as Promotion of Paddy Production and Rice Exports Project or 柬埔寨国家稻米公共仓储体系项目 or 柬埔寨促进稻谷生产与大米出口项目. Cambodian Minister of Finance and Economics Um Benmoniro, the Cambodian Minister of Commerce, Cham Prasidh, the President of the Export-Import Bank of China Liu Liange, and China CITIC Group Vice Chairman Wang Jiong signed the MoU. A second memorandum of understanding, focusing on the technical aspects of increasing rice production, such as the development, maintenance, and operation of sector-related infrastructure, was signed with CITIC Group Cooperation and Henan Yuguang International Economic and Technical Cooperation Co., Ltd., which states that CITIC Construction and Cambodia’s Green Trade Company will build paddy and milled rice warehouses in 12 locations, with a total capacity of 827,000 tonnes, and drying silos at 10 locations, which will be capable of drying 13,000 tonnes per day. According to the Cambodia-China Times, the national rice public storage service facility project will be jointly operated by the state-owned green trading company and China Henan Yuguang International Economic and Technical Cooperation Co., Ltd who together formed a joint venture, Cambodian National Rice Storage and Operation Corporation, which has a total share capital of US$40 million. Yuguang International holds 50% of the shares ($20 million USD as captured in linked Record ID#86427), and the Cambodian Green Company accounts for 20% of the shares ($8 million USD). The remaining shares ($12 million USD) are owned by Henan Industrial Large and CITIC Construction as captured in linked Record ID#86428. Ban Tilong, Director of the International Cooperation and Debt Management Bureau of the Ministry of Finance and Economics, attended the "National Rice Public Storage Service Facilities Project" consultation meeting on March 19, 2018, and said that the rice stored in public warehouses as a result of this project can be used as collateral for financing loans to designated banks. The total investment cost of the project is estimated at $350 million U.S. dollars with the Government of Cambodia paying the difference between China Eximbank's offered loan and the total implementation cost. All warehousing and drying facilities are owned by the government, but the government will authorize Henan Yuguang International Economic and Technical Cooperation Co., Ltd. to operate, with a license period of 20-25 years. The Government of Cambodia was to request the use of concessional loans from the People's Republic of China to implement this project, and on July 9, 2019, the Ministry of Finance and Economics of Cambodia issued a note to the Chinese Embassy in Cambodia on behalf of the Royal Government of Cambodia formally submitting the loan application worth $320 million USD to the Export-Import Bank of China. The project loan agreement was to be signed between September-November 2019. The EPC contract worth RMB 2.194 billion (approximately $340 million USD) was signed on June 20th, 2019.