China Eximbank provides RMB 205 million government concessional loan for Phase 2 of National Medical Center Construction Project (Linked to Record ID#61682, 96220, 96219)

Project narrative

On January 5, 2012, the Chinese Ambassador to Samoa Zhao Weiping and Samoan Prime Minister Tuilaepa signed a preferential loan framework agreement for Phase 2 of the National Medical Center Construction Project. Then, during the first half of 2012, China Eximbank and the Government of Samoa signed an RMB 205 million ($30 million) government concessional loan (GCL) agreement for Phase 2 of the National Medical Center Construction Project. The GCL carries the following borrowing terms: a 2% interest rate, a 20 year maturity, a 5 year grace period, a 0.75% commitment fee, and a 0.1% management fee. The first loan disbursement took place in June 2012 and by June 30, 2017 the loan had achieved a 100% disbursement rate. The borrower made no principal repayments between July 1, 2012 and June 30, 2013, no principal repayments between July 1, 2013 and June 30, 2014, no principal repayments between July 1, 2014 and June 30, 2015, no principal repayments between July 1, 2015 and June 30, 2016, no principal repayments between July 1, 2016 and June 30, 2017, principal repayments worth WST 5,118,295 between July 1, 2017 and June 30, 2018, principal repayments worth WST 5,084,101 between July 1, 2018 and June 30, 2019, principal repayments worth WST 5,154,718 between July 1, 2019 and June 30, 2020, and no principal repayments between July 1, 2020 and June 30, 2021. The loan's amount outstanding was WST 46,925,781 as of June 30, 2013, WST 59,342,105 as of June 30, 2014, WST 87,606,838 as of June 30, 2015, WST 80,078,125 as of June 30, 2016, WST 75,741,621 as of June 30, 2017, WST 75,167,246 as of June 30, 2018, WST 68,299,175 as of June 30, 2019, WST 62,549,452 as of June 30, 2020, and WST 60,291,026 as of June 30, 2021. The purpose of the project was to expand the National Medical Center (also known as Tupua Tamasese Meaole Hospital) in the capital city of Apia by adding an accident and emergency unit, a general outpatient’s unit, a morgue, a physiotherapy unit, a mental health center, a dental unit, a kitchen, and a laundromat. Shanghai Construction Engineering Group was the contractor responsible for implementation. In 2013, construction was underway. The project was officially completed and handed over to the local authorities on December 22, 2014. There are some indications that the China Eximbank loan for Phase 2 of the National Medical Center Construction Project has financially underperformed vis-a-vis the original expectations of the lender. In 2020, as part of G20's Debt Service Suspension Initiative (DSSI), China Eximbank and the Government of Samoa signed a debt suspension agreement. 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 multiple loan agreements, including the loan agreement for Phase 2 of the National Medical Center Construction Project. The total estimated suspension amount is $21,906,085. Then, in 2021, China Eximbank and the Government of Samoa signed another debt suspension agreement. Under the terms of the agreement, the lender agreed to suspend principal and interest payments due in 2021 under multiple loan agreements, including the loan agreement for Phase 2 of the National Medical Center Construction Project. The total estimated suspension amount was $16,436,000 ($13,506,000 in principal payments and $2,929,000 in interest payments). The 2020 debt rescheduling is captured via Record ID#96220. The 2021 debt rescheduling is captured via Record ID#96219.