China Eximbank provides $48.663 million preferential buyer's credit for Passenger Carriage Manufacturing Plant Project (Linked to Record ID#96221, 98029)

Project narrative

On October 18, 2013, China Eximbank and Myanmar Railways — a state-owned railway company under the Ministry of Rail Transportation — signed a $48.663 million preferential buyer’s credit (PBC) agreement for the Passenger Carriage Manufacturing Plant Project. The PBC carried the following borrowing terms: a 20 year maturity, a 5 year grace period, a 2% interest rate, a 0.25% commitment fee, and a 0.25% management fee. The proceeds of the PBC were to be used by the borrowing to finance 90% of the cost of a $54.070 million EPC contract between Myanmar Railway and China National Machinery Import and Export Corporation, which was signed on July 19, 2013. The purpose of this project was to build a passenger carriage manufacturing plant in the town of Myitnge within Mandalay Region. Upon completion, it was expected that the plant would be able to produce 120 passenger carriages each year. China National Machinery Import and Export Corporation was the general EPC contractor responsible for implementation. CSR Sifang Locomotive and Rolling Stock Corporation Limited was also involved in implementation of the project (most likely as a subcontractor). Construction began on June 1, 2015 and the project was officially completed on December 29, 2018. There are some indications that the China Eximbank loan for the Passenger Carriage Manufacturing 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 Record ID#98029). Debt service payments under many of these loan agreements were again deferred in 2021 (as captured via Record ID#96221).