China Development Bank provides $425.5 million loan for North-South Highway Project (Linked to Record ID#39865, #69279)

Project narrative

On August 27, 2013, China Development Bank (CDB) provided two loans -- one worth $425.5 million (captured via Record ID#64345) and other worth RMB 200 million (captured via Record ID#69279) to Jamaica North South Highway Company Ltd. (JNSHC) for the North-South Highway Project. Both CDB loans carried the following terms: a maturity of 20 years, a grace period of 3 years, and an interest rate of 6-month LIBOR plus 460 basis points. The purpose of the project was to construct the North-South Highway. The start of the 66.47 km toll road is near the Caymanas Economic Zone which connects with the Mandela Highway. The North-South toll road passes through Spanish Town, Bog Walk, Linstead, Ewarton, Moneague, Golden Grove, and Ocho Rios terminating in Mammee Bay, which is east of St. Ann’s Bay and west of Ocho Rios. The highway consists of three 3 sections: Caymanas, Kingston to Linstead, St. Catherine (Section 1); Linstead, St. Catherine to Moneague, St. Ann. (Section 2); Moneague to Mammee Bay, St. Ann (Section 3). The project was implemented on a public-private partnership (PPP) and financed according to a debt-to-equity ratio of 75:25. The owners of JNSHC provided $150 million in equity contributions. The Jamaica North-South Highway Company Limited (JNSHC) is a project company (special purpose vehicle) founded on September 13, 2011 in Jamaica by a holding company registered in Barbados by CCCC International, China Harbor Engineering, CCCC First Harbor Engineering, CCCC Second Highway Engineering, and CCCC Second Highway Consultants. JNSHC is responsible for financing, design, constructing and operating the 66.47 km toll road on a build-operate-transfer (BOT) basis and was given a concession period of 50 years. Upon completion of the concession, the toll road was to be handed back to the Government of Jamaica at no cost. China Harbor Engineering Company Ltd. (CHEC) was the EPC contractor. Construction began on April 18, 2013. The first section of the highway that opened to motorists was Section 2 on August 5, 2014. Collection of toll fares began on September 6, 2015. The project was completed on February 25, 2016. The North-South Highway was renamed the Edward Seaga Highway, in honor of the former Jamaican Prime Minister, on June 12, 2018. The project was originally expected to commenced in April 2013 and conclude within 12 months (April 2014), In 2023, the JNSHC advised National Road Operating and Constructing Company Limited (NROCC) of the occurrence of a force majeure event and the remedy of an extension of time to the concession term provided in the concession agreement. However, at that time. the JNSHC had not yet quantified its revenue losses. Quantification of the magnitude of the revenue losses was required to determine the length of the necessary concession term extension.