ICBC and China Eximbank pledges EUR 205 million loan for Linsan-Fomi-Kankan Electricity Transmission Line Project (Linked to Record ID#65113 and Record ID#64352)

Project narrative

In 2017, ICBC and China Eximbank agreed in principle to provide a EUR 205 million loan to the Republic of Guinea for the Lisan-Fomi-Kankan Electricity Transmission Line Project. This loan will be issued as a subsidiary loan agreement under the $20 billion Resource and Loan Cooperation Framework Agreement that the Chinese Government and the Republic of Guinea signed on September 5, 2017 (see Record ID#65113 and Record ID#64352). As such, it will carry the following terms: 15-year maturity, 4 year grace period, and an interest rate of 6-month Euribor plus a 2.5% margin. The 6-month Euribor rate for September 2017 is used to calculate the interest rate (-.273% + 2.5% = 2.227%). The repayment of loans made under the agreement were to be collateralized by the mineral resources and other revenues relating to mineral rights granted to Chinese companies Henan China, Chalco and SPIC. The proceeds of the loan will be used to fund an EPC contract that China International Water and Electrical Corporation (CWE) signed with Guinea’s Ministry of Energy and Water Resources on May 26, 2017. The purpose of this project is to transmit power generated by the China Eximbank-financed Kaleta and Souapiti hydropower plants (see Record ID#53003 and Record ID#187) by constructing 225kV electricity transmission lines between Linsan, Fomi, and Kankan that are 393 kilometers in length. It also involves the construction of four 225kV substations and some rural electrification along the line. Upon completion, the project will connect the proposed Guinea-Mali 225kV transnational transmission and distribution network in eastern Guinea with the planned OMVG, CLSG, and OMVS transmission and distribution network in Western Guinea. The African Development Bank (ADB) financed a feasibility study for this project and CWE is the contractor responsible for its implementation.