Narrative
Full Description
Project narrative
On February 14, 2006, during Myanmar Prime Minister Soe Win's visit to China, China Eximbank and Myanmar Posts and Telecommunication (MPT) — a state-owned enterprise in Myanmar — signed a $31.5 million subsidiary buyer’s credit loan agreement for Phase 1 of the National Telecommunications Network Construction Project. The borrowing terms of the loan are unknown. The proceeds of the loan were to be used by the borrower to finance a commercial contract between MPT and ZTE Corporation for Phase 1 of the National Telecommunications Network Construction Project. There are some indications that the China Eximbank buyer's credit loan for Phase 1 of the National Telecommunications Network Construction 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. This $31.5 million loan appears to have been part of a larger, $150 million loan commitment captured via Record ID#34116. 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. The Chinese project title is 缅甸通讯设备项目. 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 15.0531 years in 2006. AidData estimates the maturity of the China Eximbank buyer's credit loan that supported Phase 1 of the National Telecommunications Network Construction 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 5.7195 years in 2006. AidData estimates the grace period of the China Eximbank buyer's credit loan that supported Phase 1 of the National Telecommunications Network Construction 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 2.8597% in 2006. AidData estimates the interest rate of the China Eximbank buyer's credit loan that supported Phase 1 of the National Telecommunications Network Construction Project by using this figure. See https://www.dropbox.com/s/ab8qt4n6jijcbhd/IDS_Average%20interest%20on%20new%20external%20debt%20commitments.xlsx?dl=0