China Eximbank provides $201.2 million preferential buyer’s credit for Phase 2 of the Malabo Power Grid Project

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.