Narrative
Full Description
Project narrative
In 2013, China Eximbank and the Government of Guinea signed a $50 million preferential buyer’s credit (PBC) agreement for the SOTELGUI Modernization and Expansion Project. The Government of Guinea, in turn, used the proceeds from the PBC to on-lend to Société des Télécommunications de Guinée (SOTELGUI or 是几内亚国家电信公司), a state-owned telecommunications company. The estimated borrowing terms of the loan include a 9.0938-year grace period, a 20.361-year maturity, and a 1.9332% interest rate. The loan's principal amount outstanding was $33.09 million as of June 30, 2020, $33.09 million as of December 31, 2020, $32 million as of June 30, 2022, and $31 million as of September 30, 2022. The project involved upgrading Guinea's telecommunications network from 2G to 4G. Huawei Technologies was the contractor responsible for implementation and it provided equipment in pursuit of this objectively. This project reportedly reached completion. However, the precise date of completion is unknown, and Guinea still did not have a 4G network as of early 2019.
Staff comments
1. This project is also known as the 4G National Fiber Network Construction Project. The French project title is Modernisation et l’Expansion de la SOTELGUI or Modernisation des Réseaux de Sotelgui or Projet de réhabilitation de SOTELGUI or l'extension et la modernisation du réseau téléphonique en République de Guinée. The Chinese project title is 几内亚国家电信公司 or 电信网升级换代改造项目. 2. The World Bank’s Debt Reporting System (DRS) indicates that official sector loan commitments from China to the Government of Guinea (and/or entities backed by Government of Guinea repayment guarantees) in 2013 amounted to $387,038,766.50. This amount is roughly equivalent to the sum of the $334.65 million loan that China Eximbank issued for the 240MW Kaléta Hydroelectric Power Plant Construction Project (captured via Record ID#53003) in 2013 and the $50 million loan that China Eximbank issued for the SOTELGUI Modernization and Expansion Project (captured via Record ID#64324) in 2013. 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 Guinea was 20.361 years in 2013. AidData estimates the maturity of the China Eximbank loan that supported the SOTELGUI Modernization and Expansion Project by using this figure. See https://www.dropbox.com/scl/fi/z79xr3w040d2zufaw0eow/October-2024-Extract-from-IDS-on-Guinea-s-Borrowings-and-Borrowing-Terms-from-Official-PRC-Creditors.xlsx?rlkey=axiwonwbe90ne6avkoxynkzxf&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 Guinea was 9.0938 years in 2013. AidData estimates the grace period of the China Eximbank loan that supported the SOTELGUI Modernization and Expansion Project by using this figure. See https://www.dropbox.com/scl/fi/z79xr3w040d2zufaw0eow/October-2024-Extract-from-IDS-on-Guinea-s-Borrowings-and-Borrowing-Terms-from-Official-PRC-Creditors.xlsx?rlkey=axiwonwbe90ne6avkoxynkzxf&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 Guinea was 1.9332% in 2013. AidData estimates the interest rate of the China Eximbank loan that supported the SOTELGUI Modernization and Expansion Project by using this figure. See https://www.dropbox.com/scl/fi/z79xr3w040d2zufaw0eow/October-2024-Extract-from-IDS-on-Guinea-s-Borrowings-and-Borrowing-Terms-from-Official-PRC-Creditors.xlsx?rlkey=axiwonwbe90ne6avkoxynkzxf&dl=0