China Eximbank provides $29.97 million loan for 51MW Upper Keng Tawng Hydropower Plant Project (Linked to Project ID#98029, 96221)

On July 30, 2010, China Eximbank and the Government of Myanmar signed a $29.97 million loan agreement for the 51MW Upper Keng Tawng Hydropower Plant (HPP) Project. The borrowing terms of the loan are unknown. However, it is known that the borrower was to use the proceeds of the loan to finance a commercial contract (Contract No. 9/DHPI/2010-2011) between Myanmar’s Ministry of Electric Power No (1) and China National Technical Import & Export Corporation (CNTIC), which was signed on April 8, 2010. The purpose of the project is to construct a 51MW hydroelectric power plant on the Nam Teng River, 14 miles southwest of Keng Tawng Town, Mone Township, Southern Shan State. It involves the construction of a 56 meter high rock fill dam diverting the water to a 526 meter long headrace tunnel, followed by a 337 meter long penstock leading to a semi underground powerhouse. The power plant will be connected to the Namsan substation via a 132 kV transmission line. CNTIC is the EPC contractor responsible for implementation. Construction reportedly commenced in 2008 and the project was originally planned for completion in 2018. The expected completion date was later pushed back to the 2020-2021 fiscal year. There were calls by civil society to cancel the construction of the project. There are also some indications that the China Eximbank loan for the 51MW Upper Keng Tawng Hydropower Plant Project may have financially underperformed vis-a-vis the original expectations of the lender. In 2020, China Eximbank and the Government of Myanmar signed a debt suspension agreement as part of the G-20 Debt Service Suspension Initiative (DSSI). Under the terms of the agreement, the lender agreed to suspend principal and interest payments due between May 1, 2020 and December 31, 2020 under 3 buyer’s credit loan (BCL) agreements, 6 government concessional loan (GCL) agreements, and 27 preferential buyer’s credit (PBC) agreements (as captured via Project ID#98029). Debt service payments under many of these loan agreements were again deferred in 2021 (as captured via Project ID#96221).

Additional details

1. This project is also know as the Upper Kengtawng Hydropower Project, the 51MW Upper KyaingTaung Hydropower Project, and the Upper Kyeintaung Hydropower Project. The Chinese project title is 上景唐水力发电厂. The Burmese project title is အထက်ကျ ိုင်ဵေတာင်ဵေရအာဵလျှပ်စစ်စီမဳကိန်ဵ. 2. The China Eximbank loan that supported this project is not included in the Overseas Development Finance Dataset that Boston University’s Global Development Policy Center published in December 2020. 3. One unofficial source puts the face value of the loan at $9,504,000. Another unofficial source puts the face value of the loan at $34.72 million. However, AidData relies upon the face value ($29.97 million) reported in a 2018 audit report that was published by Myanmar’s Parliament (Pyidaungsu Hluttaw). 4. According to the World Bank's Debtor Reporting System (DRS), the weighted average maturity of all official sector lending from Chinese creditors to government and government-guaranteed borrowing institutions in Myanmar was 19.3343 years in 2010. AidData estimates the maturity of the China Eximbank loan that supported the 51MW Upper Keng Tawng Hydropower Plant Project by using this figure. See https://www.dropbox.com/s/949n5rctiue6d7c/IDS_Average_grace_period_and_maturity_on_new_external_debt_commitments.xlsx?dl=0 5. According to the World Bank's Debtor Reporting System (DRS), the weighted average grace period of all official sector lending from Chinese creditors to government and government-guaranteed borrowing institutions in Myanmar was 5.0126 years in 2010. AidData estimates the grace period of the China Eximbank loan that supported the 51MW Upper Keng Tawng Hydropower Plant Project by using this figure. See https://www.dropbox.com/s/949n5rctiue6d7c/IDS_Average_grace_period_and_maturity_on_new_external_debt_commitments.xlsx?dl=0 6. According to the World Bank's Debtor Reporting System (DRS), the weighted average interest rate of all official sector lending from Chinese creditors to government and government-guaranteed borrowing institutions in Myanmar was 3.7267% in 2010. AidData estimates the interest rate of the China Eximbank loan that supported the 51MW Upper Keng Tawng Hydropower Plant Project by using this figure. See https://www.dropbox.com/s/ab8qt4n6jijcbhd/IDS_Average%20interest%20on%20new%20external%20debt%20commitments.xlsx?dl=0

Number of official sources

9

Number of total sources

17