China Development Bank contributes $570 million to $1.75 billion syndicated loan for Phase 1 of Hengyi Pulau Muara Besar (PMB) Oil Refinery and Petrochemical Complex Construction Project (Linked to Record ID#34668, #71636, #71637, #71638, #71639, and #49198)

Project narrative

In August 2018, a syndicate of Chinese state-owned banks [China Development Bank; The Export-Import Bank of China (Zhejiang Branch); Bank of China (Zhejiang Branch); Industrial and Commercial Bank of China; China Merchants Bank (Hangzhou Xiaoshan Branch) signed a $1.75 billion loan agreement with Hengyi Industrial (Brunei) Co., Ltd. [or Hengyi Industries SDN BHD or 恒逸文莱公司 or 资企业恒逸实业（文莱）有限公司] — a special purpose vehicle and joint venture of Hongkong Tianyi International Holdings Company Ltd (70% ownership stake) and Damai Holdings (30% ownership stake) — for Phase 1 of the Hengyi Pulau Muara Besar (PMB) Oil Refinery and Petrochemical Complex Construction Project. The equity component is captured via Record ID#34668. China Development Bank contributed $570 million (as captured via Record ID#62760). The specific amounts contributed by the Export-Import Bank of China (Zhejiang Branch), Bank of China (Zhejiang Branch), Industrial and Commercial Bank of China, and China Merchants Bank (Hangzhou Xiaoshan Branch) are unknown. The contribution from Export-Import Bank of China (Zhejiang Branch) is captured via Record ID#71636. The contribution from Bank of China (Zhejiang Branch) is captured via Record ID#71637. The contribution from Industrial and Commercial Bank of China is captured via Record ID#71638. The contribution from China Merchants Bank (Hangzhou Xiaoshan Branch) is captured via Record ID#71639. The syndicated loan carried a 12-year maturity and a 3-year grace period. Hengyi Petrochemical Co. (a subsidiary of Zhejiang Hengyi Group Co., Ltd.) and Zhejiang Yisheng Petrochemical Co. (a subsidiary of Hengyi Petrochemical Co., which is a subsidiary of Zhejiang Hengyi Group Co., Ltd.) issued a joint liability guarantee in support of the loan. Chu Jianlin — the owner of Zhejiang Hengyi Group Co., Ltd. — also provided a personal unlimited joint liability guarantee (including all of his personal property) in support of the loan. Zhejiang Hengyi Group Co., Ltd and related subsidiaries pledged shares of stock as a source of collateral. A sales revenue account was also formally pledged as a source of collateral. Additionally, the borrower purchased a credit insurance policy from Sinosure. The purpose of the project was to construct an oil refinery and petrochemical complex on the island of Pulau Muara Besar (PMB) with the capacity to produce 8 million tons of crude oil each year, 500,000 tons of benzene each year, and 1 million tons of aromatics (para-xylene) each year. Upon completion, Phase 1 was expected to create 1000 jobs and generate output worth $5.5 billion. The project commenced in March 2017. Phase 1 was completed and the petrochemical complex and oil refinery went into production on November 3, 2019. China Harbor Engineering Company (CHEC) constructed the Pulau Muara Besar Bridge as part of this refining and chemical integration project in a build and operate contract lasting 2 years. China Development Bank provided an additional loan for the bridge in 2015 (as captured via Record ID#49198). The bridge is 2.7 km long, 23.6 meters wide, and contains a two-way four-lane highway connecting the Brunei capital, Bandar Seri Begawan, to the island Pulau Muara Besar. On May 6, 2015, CHEC and the Brunei Economic Development Board signed the contract and held the groundbreaking ceremony for the project. On May 18, 2018, the bridge was formally completed.