China Eximbank provides RMB 207 million government concessional loan for Phase 2 of National Fibre Optic Backbone Infrastructure Project (Linked to Project ID#30254)

On June 23, 2019, the Chinese Government and the Government of Sierra Leone signed a preferential loan framework agreement for Phase 2 of the National Fibre Optic Backbone Infrastructure Project. Then, on August 26, 2019, China Eximbank and the the Government of Sierra Leone’s Ministry of Finance signed an RMB 207,000,000 government concessional loan (GCL) agreement [CHINA EXIMBANK GCL NO (2019) 10 TOTAL No. (681)] for Phase 2 of the National Fibre Optic Backbone Infrastructure Project. The GCL agreement was then ratified by Sierra Leone’s Parliament on September 19, 2019. The borrowing terms of the GCL are as follows: a 20-year maturity, a 5-year grace period, a 1% interest rate, a 0.25% (RMB 517,500) management fee, and a 0.25% commitment fee. The borrower is responsible for repaying the loan between 2024 and 2039. Under the terms of the agreement, Government of Sierra Leone’s Ministry of Finance is also responsible for on-lending the proceeds of the GCL to a state-owned enterprise in Sierra Leone known as Sierra Leone Cable Company Limited (SALCAB). SALCAB, in turn, is expected to use the proceeds of the GCL to finance a $30 million commercial contract (ID#0002881900010V) between the Government of Sierra Leone’s Ministry of Information and Communications and Huawei Technologies Co., Ltd., which was signed on April 11, 2019. SALCAB signed an on-lending agreement with the Ministry of Finance on August 22, 2019. The purpose of the project is to lay a 721.5-kilometer fiber-optic network that covers 15 major cities in the northern, eastern and southern regions of Sierra Leone. Upon completion, the telecommunications infrastructure is expected to allow telecommunications operators to offer 3G and 4G services. Huawei Technologies Co., Ltd. is the EPC contractor responsible for implementation. On April 24, 2020, the Government of Sierra Leone received the relevant technical equipment for project implementation. By September 2020, construction had commenced. Then, on September 28, 2020, Sierra Leone’s Ministry of Information and Communications and Sierra Leone Cable Limited (SALCAB) carried out an inspection visit to a project site in Moyamba. The delegation also inspected the work in progress along the Mano Junction-Daru axis. The technical implementation of the work involves digging the path where the fiber cables will be laid, deploying the fiber ducts, backfilling the path and finally blowing the fiber through the duct. The work along this axis was approximately 50% complete in September 2020. The second phase of the network is expected to reach completion within two years. Once the project’s civil work are completed, the next step will be the installation of other equipment and the introduction of fiber optic cables inside the high definition power pipes.

Additional details

1. In 2012, China Eximbank provided RMB 97 million for Phase I of this project (as captured via Project ID#30254). 2. This project is also known as the National Fibre Backbone Phase II Project, the Second Phase of the Fiber Optic Cable Project, and the NFB Phase 2 Project. The Chinese project title is 塞拉利昂光纤骨干网二期项目. 3. The Government of Sierra Leone loan identification number for this project is 2019012. 4. The identification number for this project in the Government of Sierra Leone’s Development Assistance Database (DAD) is SL/004762. 5. This China Eximbank loan is not recorded the China’s Overseas Development Finance Dataset, which Boston University's Global Development Policy Center published in December 2020. Nor is it included in the database of Chinese loan commitments that SAIS-CARI released in July 2020. 6. The first phase of the fiber optic backbone project was also implemented by Huawei, reportedly as part of a broader scheme supported by the World Bank and Economic Community of West African States (ECOWAS) to expand digital access throughout the region. 7. The Sierra Leone Cable Limited (SALCAB) — a state-owned enterprise — was created by the Government of Sierra Leone as part of an effort to participate in the Africa Coast to Europe (ACE) Consortium that landed the undersea Submarine Fibre Optic Cable.  SALCAB has two components, both of which were financed with loans. The ACE submarine cable is being paid for with a World Bank loan. The terrestrial backbone is being paid for with loans from Islamic Development Bank and China Eximbank. 8. The China Eximbank GCL (loan) agreement can be accessed in its entirety via https://www.dropbox.com/s/2jp6sb3je9altau/Government%20Concessional%20Loan%20on%20Sierra%20Leone%20Fibre%20Backbone%20Network%20Project%20Phase%20II%20August%2026%2C%202019.pdf?dl=0. 9. The on-lending agreement between the Government of Sierra Leone’s Ministry of Finance and SALCAB can be accessed in its entirety via https://www.dropbox.com/s/2jp6sb3je9altau/Government%20Concessional%20Loan%20on%20Sierra%20Leone%20Fibre%20Backbone%20Network%20Project%20Phase%20II%20August%2026%2C%202019.pdf?dl=0. 10. The commercial contract (ID#0002881900010V) between the Government of Sierra Leone’s Ministry of Information and Communications and Huawei Technologies Co., Ltd can be accessed in its entirety via https://www.dropbox.com/s/2jp6sb3je9altau/Government%20Concessional%20Loan%20on%20Sierra%20Leone%20Fibre%20Backbone%20Network%20Project%20Phase%20II%20August%2026%2C%202019.pdf?dl=0.

Number of official sources

10

Number of total sources

23