China Eximbank provides $60 million loan for 111MW Tha Htay Hydropower Plant Construction Project (Linked to Project ID#96221, 98029)

In early 2012, China Gezhouba Group Company Limited and Myanmar’s Ministry of Electric Power No (1) signed an equipment installation contract for the 111MW Tha Htay Hydropower Plant Construction Project. China Eximbank issued a loan to the Government of Myanmar for the 111MW Tha Htay Hydropower Plant Construction Project and it was likely used by the borrower to finance this equipment installation contract. One unofficial source puts the face value of the China Eximbank loan at $49.357 million. Another unofficial source puts the face value at $119.17 million. However, AidData relies upon the face value ($60 million) reported by the Goverment of Myanmar’s Ministry of National Planning and Economic Development. The borrowing terms of the loan are unknown. The Norwegian Government is also supporting the 111MW Tha Htay Hydropower Plant Construction Project. The purpose of the project is to construct a 111 MW hydroelectric power plant on the Tha Htay River, about 19 kilometers northeast of the town of Thandwe in Rakhine State. It involves the construction of a 91 meter rock fill high dam. The power plant was also expected to be connected to the Oakshitpin-Taun Gup substation by an 8.5 km 230 kV transmission line. China Gezhouba Group Company Limited is the contractor responsible for project implementation. Sources differ on the timing of the commencement of project implementation. A World Bank source claims that construction began in 2008, while a Myanmar Project Bank source reports that construction began during the 2013-2014 fiscal year. As of May 2017, the project had achieved a 50% completion rate. It is scheduled for completion in the 2023-24 fiscal year. There are some indications that the China Eximbank loan for the 111MW Tha Htay Hydropower Plant Construction 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. 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. 2. This project is also known as the 111MW Thu Htay Chaung Hydropower Plant Construction Project and the 111MW Tha-Htay Hydropower Plant Construction Project. The Chinese project title is 萨泰水电站机 or 萨泰水电站机电及金结供货安装项目. The Burmese project title is ၁၁၁ မဂ္ဂါဝပ်ထုတ်လုပ်မည့် သူဋ္ဌေး ရေအားလျှပ်စစ်စီမံကိန်းစ or သူေ႒းေခ်ာင္းေရအားလွ်ပ္စစ္. 3. 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 12.7631 years in 2012. AidData estimates the maturity of the China Eximbank loan that supported the 111MW Tha Htay Hydropower Plant Construction 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 4. 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 4.0351 years in 2012. AidData estimates the grace period of the China Eximbank loan that supported the 111MW Tha Htay Hydropower Plant Construction 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 interest rate of all official sector lending from Chinese creditors to government and government-guaranteed borrowing institutions in Myanmar was 3.206% in 2012. AidData estimates the interest rate of the China Eximbank loan that supported the 111MW Tha Htay Hydropower Plant Construction 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

7

Number of total sources

14