Narrative
Full Description
Project narrative
On May 27, 2011, China Eximbank and Myanmar Foreign Trade Bank (MFTB) signed an RMB 292 million government concessional loan (GCL) agreement for the Purchasing Dredgers and Supporting Vessels Project. The borrowing terms of the GCL are unknown. However, it is known that the borrower was to use the GCL proceeds to finance a $40 million commercial contract that China National Aero-Technology Import & Export Corporation (CATIC) and Myanmar’s Ministry of Transportation signed on December 13, 2010. The purpose of the project was to facilitate the acquisition of 19 dredgers and auxiliary vessels by the Ministry of Transportation of Myanmar. CATIC began building the watercraft – including five cutter suction dredgers, two backhoe dredgers, four split hopper barges, a tug boat, a landing craft and six aid vessels – in December 2011. It completed the construction of the watercraft in June 2013. One batch of the dredgers and vessels arrived in Yangon on July 20, 2013 and another arrived in August 2013. A project completion ceremony took place on September 14, 2013. There are some indications that the China Eximbank loan for the Purchasing Dredgers and Supporting Vessels 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 Record ID#98029). Debt service payments under many of these loan agreements were again deferred in 2021 (as captured via Record ID#96221).
Staff comments
1. AidData assumes that the government concessional loan covered 100% of the commercial contract value (per China Eximbank policy regarding government concessional loans). 2. The China Eximbank loan that supported this project is not included in the Overseas Development Finance Dataset that Boston University’s Global Development Policy Center published in December 2020. 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 Myanmar was 15.0477 years in 2011. AidData estimates the maturity of the China Eximbank loan that supported the Purchasing Dredgers and Supporting Vessels 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 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 Myanmar was 5.7977 years in 2011. AidData estimates the grace period of the China Eximbank loan that supported the Purchasing Dredgers and Supporting Vessels 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 interest rate of all official sector lending from Chinese creditors to government and government-guaranteed borrowing institutions in Myanmar was 4.6293% in 2011. AidData estimates the interest rate of the China Eximbank loan that supported the Purchasing Dredgers and Supporting Vessels Project by using this figure. See https://www.dropbox.com/s/ab8qt4n6jijcbhd/IDS_Average%20interest%20on%20new%20external%20debt%20commitments.xlsx?dl=0 6. This project is also known as the 19 Purchasing Dredgers and Supporting Vessels Project. The Burmese project title is ေသာင္တူးေရယာဥ္၀ယ္ယူေရး.