China Eximbank provides $101.98 million preferential buyer's credit for Upper Yeywa-Shwesaryan 230 kV Transmission Line and 230 kV Shwesaryan Substation Extension Project (Linked to Project ID#96221, 98029)

On April 5, 2013, China Eximbank and the Government of Myanmar signed a $101.98 million preferential buyer’s credit (PBC) agreement for the Upper Yeywa-Shwesaryan 230 kV Transmission Line and 230 kV Shwesaryan Substation Extension Project. The signing of the loan agreement marked the completion of the financing of the project and a major breakthrough in the progress of the project. The borrowing terms of the PBC are unknown. However, it is known that the borrower was to use the proceeds of the loan to finance 90% of the cost of a commercial contract with Hydrochina Corporation (中国水电工程顾问集团), which was signed on March 1, 2012. Hydrochina Corporation (中国水电工程顾问集团) is a wholly-owned subsidiary of PowerChina. The purpose of the project was to construct a 129 km, 230 kV power transmission line from a to-be-constructed 280MW (4x70MW) Upper Yeywa Hydropower Plant (exact locational coordinates: 22.2413452801704, 97.10127992329045) to the Shwesaryan (Shwe Sar Yan) substation (exact locational coordinates: 21.85798, 96.23105) in Patheingyi Township. As of 2017, this project had achieved a 28% completion rate. However, AidData has not identified any evidence that it reached completion. Implementation delays are likely related to the fact that the 280MW (4x70MW) Upper Yeywa Hydropower Plant was still not complete as of Q2 of 2021 and its construction has triggered various protests. Shan civil society groups have opposed the building of the Upper Yeywa Hydropower Plant. They claim that the project, which was started by the military regime in 2008, was initiated without local consultation or consent and that the reservoir of the 280 megawatt dam will stretch for 60 kilometers up to Hsipaw town, submerging centuries-old Shan communities and fertile farmlands. The dam site also lies in an active conflict zone, and Burma Army troops guarding the site have allegedly committed gross human rights violations against local villagers, including extrajudicial killing, torture and use of human shields. On February 17, 2021, workers from the Upper Yeywa dam site joined protests in Kyaukme, holding a banner that said ‘Upper Yeywa Hydropower Project Civil Disobedience Movement.’ There are some indications that the China Eximbank loan for the Upper Yeywa-Shwesaryan 230 kV Transmission Line and 230 kV Shwesaryan Substation Extension 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 known as the Upper Yeywa-Shwesaryan 230 kV Twin Bundle Double Circuit Transmission Line and 230 kV Shwesaryan Substation Extension Project and the Design, Material Supply and Technical Service of Upper Yeywa-Shwesaryan 230 KV Twin Bundle Double Circuit Transmission Line (80 Miles) and 230 KV Shwesaryan Substation Extension Project. The Chinese project title is 上耶涯输变电项目 or 缅甸上耶崖（UpperYeywa）输变电项目. The Burmese project title is အထက်ရဲရွာေရအာဵလျှပ်စစ်စီမဳကိန်ဵလျှပ်စစ်ဓာတ်အာဵပို့လွှတ်ေရဵနှငဴ်. 2. In the Overseas Development Finance Dataset that Boston University’s Global Development Policy Center published in December 2020, it estimates the face value of the China Eximbank loan that supported this project as $180 million. However, AidData relies on the face value of the PBC ($101.98 million) that is reported by the contractor responsible for implementation. 3. Shan civil society groups claim that the 280MW (4x70MW) Upper Yeywa Hydropower Plant Project is being financed by China Eximbank, but AidData has not yet independently confirmed that this is indeed the case. The dam site is located in the upper reaches of the Myitnge River (also called Nam Tu) in Pyinoolwin District, Mandalay Region. The concrete gravity dam will be 97 meters high and it will create a 26.9 km2 reservoir storing 342 hm3 . The reservoir will be about 60 km long reaching Hsipaw Town in Shan State. A 12 meter wide, 32 km long access road will connect the main project site to the Mandalay-Lashio Highway at milepost 95/0. A 10 meter diameter, 308 meter long construction diversion tunnel on the right bank was completed and the river diverted on March 9, 2015. Two 12.5 meter diameter headrace tunnels — 473 meters and 538 meters long, respectively — are being excavated on the left bank. The Government of Myanmar has approved the Environmental and Social Impact Assessment (ESIA) for the project. Two villages with a total of 143 households and 486 inhabitants will be affected by the reservoir and need relocation to two existing neighboring villages 13 km and 22 km away from the river. 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 11.3692 years in 2013. AidData estimates the maturity of the China Eximbank loan that supported the Upper Yeywa-Shwesaryan 230 kV Transmission Line and 230 kV Shwesaryan Substation Extension 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 3.5596 years in 2013. AidData estimates the grace period of the China Eximbank loan that supported the Upper Yeywa-Shwesaryan 230 kV Transmission Line and 230 kV Shwesaryan Substation Extension 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 3.8936% in 2013. AidData estimates the interest rate of the China Eximbank loan that supported the Upper Yeywa-Shwesaryan 230 kV Transmission Line and 230 kV Shwesaryan Substation Extension 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

5

Number of total sources

15