China Eximbank provides $52 million concessional loan for International Convention Center and Government Building Complex Construction Project (Linked to Record ID#96220, 96219)

Project narrative

On March 9, 2007, the Shanghai Construction Engineering Group (SCG) and Samoa's Ministry of Finance signed a memorandum of understanding (MOU) regarding the International Convention Center and Government Building Complex Construction Project. Then, on February 15, 2008, Chinese Ambassador Shi Longzhuang and Samoan Prime Minister Tuilaepa signed a preferential loan framework agreement for the International Convention Center and Government Building Complex Construction Project. On September 7, 2008, the Chinese Minister of Commerce Chen Deming and the Deputy Prime Minister of Samoa, Honorable Misa Telefon Retzlaff, held talks in Xiamen. After the talks, Li Jun, Deputy Governor of China Eximbank, and Hinaray Petana, Chief Executive Officer of the Ministry of Finance of Samoa, signed a $52 million concessional loan agreement for the International Convention Center and Government Building Complex Construction Project on behalf of their governments. The loan carried the following borrowing terms: a 2% interest rate, a 20 year maturity, a 5 year grace period, a 0.75% commitment fee, and a 0.1% management fee. The proceeds of the loan were to be used by the borrower to finance a commercial contract with Shanghai Construction Engineering Group (SCG), which as signed on June 13, 2008. The loan had achieved a 100% disbursement rate as of June 30, 2017. The borrower made principal repayments worth WST 7,226,447 between July 1, 2016 and June 30, 2017, principal repayments worth WST 7,490,188 between July 1, 2017 and June 30, 2018, principal repayments worth WST 7,440,147 between July 1, 2018 and June 30, 2019, principal repayments worth WST 7,543,490 between July 1, 2019 and June 30, 2020, and no principal repayments between July 1, 2020 and June 30, 2021. The loan's amount outstanding was WST 117,187,500 as of June 30, 2013, WST 109,143,827 as of June 30, 2014, WST 115,798,180 as of June 30, 2015, WST 98,286,290 as of June 30, 2016, WST 85,812,695 as of June 30, 2017, WST 83,448,919 as of June 30, 2018, WST 74,037,046 as of June 30, 2019, WST 65,905,764 as of June 30, 2020 and WST 61,377,927 as of June 30, 2021. The purpose of the project was to construct a 6-story, 2500 square foot government office complex (that can house ten government ministries and corporations and offices of four ministers) and an international convention center (located behind the government office complex) with seating capacity for 450 people. The convention center is fully equipped with interpreter rooms, video conference systems and a state of the art PA sound system. It also has a VIP room that can be partitioned and is fully air conditioned. The government office complex and international convention center are located on the old site of the Western Samoa Trust Estate Corporation (WSTEC) — and later the Siva Afi Entertainment Centre — in the Sogi neighborhood within the capital city of Apia. SCG was the contractor responsible for implementation. On September 17, 2008, the Government of Samoa held the unveiling ceremony for the project design plan. Then, on January 25, 2010, a groundbreaking ceremony took place. The project completion and handover ceremony took place on November 4, 2011. There are some indications that the China Eximbank loan for the International Convention Center and Government Building Complex Construction Project has financially underperformed vis-a-vis the original expectations of the lender. In 2020, as part of G20's Debt Service Suspension Initiative (DSSI), China Eximbank and the Government of Samoa signed a debt suspension agreement. 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 multiple loan agreements, including the loan agreement for the International Convention Center and Government Building Complex Construction Project. The total estimated suspension amount is $21,906,085. Then, in 2021, China Eximbank and the Government of Samoa signed another debt suspension agreement. Under the terms of the agreement, the lender agreed to suspend principal and interest payments due in 2021 under multiple loan agreements, including the loan agreement for the International Convention Center and Government Building Complex Construction Project. The total estimated suspension amount was $16,436,000 ($13,506,000 in principal payments and $2,929,000 in interest payments). The 2020 debt rescheduling is captured via Record ID#96220. The 2021 debt rescheduling is captured via Record ID#96219.