ICBC provides $1.2891 billion buyer's credit loan for New Angola International Airport (NAIA) Construction Project (Linked to Project ID#65524, #72349)

On May 9, 2018, the Industrial and Commercial Bank of China (ICBC) and the Government of Angola signed a USD 1.2891 billion buyer’s credit loan (BCL) agreement for the New Angola International Airport (NAIA) Construction Project. The loan carries the following borrowing terms: a 15-year maturity, an 18-month grace period, and an unknown interest rate. It is backed by a Sinosure credit insurance policy. The borrower is expected to use the loan proceeds to finance 85% of the cost of a USD 1.51 billion commercial contract between Angola’s Ministry of Transportation (MINTRANS) and China National Aero-Technology International Engineering Corporation (AVIC-ENG). The purpose of the project is to construct and equip the New Angola International Airport (NAIA), which is located approximately 40 km to the southeast of the centre of Luanda, in the Bom Jesus commune, Icole e Bengo municipality in Luanda Province. The airport is designed to be an alternative to the existing Quatro de Fevereiro Airport, another international airport that serves Luanda. The new airport is being designed to have an annual capacity of 15 million passengers and 600,000 tons of cargo, with a 4,200 meter runway and 3,800 meter runway, and a 160,000 square meter terminal. The airport will also have 12 aircraft docks, a VIP passenger terminal, and an air traffic control tower. China National Aero-Technology International Engineering Corporation (AVIC-ENG) is the EPC contractor responsible for implementation. Construction on this project began in 2007 under the management of the China International Fund (CIF); however, in February 2019, the Angolan Government announced that it had cancelled the contract with CIF. CIF was replaced by AVIC-Eng. Other contractors and suppliers involved in the project are Metallurgical Corporation of China (CTMCC), Dalian Zongyi Science & Technology Development, Fangda New Materials (Jiangxi), and Beijing Urban Construction Exploration & Surveying Design Research Institute. Angola's Ministry of Transportation (MoT) also appointed Mace Engineering Group as project manager and site supervisor for the project on March 27, 2015. As of August 2019, the project had achieved a 60% completion rate, with plans to commission the airport in 2022. However, due to financial problems, work on the project was halted in 2019. Then, at the second Ordinary Session of the Cabinet Council, held on February 28, 2019, Angola’s Ministry of Transport was directed to conduct technical and financial review of the project in order to guarantee its completion, ensure better alignment with various ministerial departments, and establish a new schedule of actions. Then, in May, 2020, an addendum to the commercial contract between AVIC-Eng and MINTRANS was signed. At the same time, the parties signed a Memorandum of Understanding (MOU) as part of the technical review work to adapt the quality and operational parameters of the new airport. Work resumed on May 17, 2021. Then, on June 17, 2022, the airport organized its first test flight as part of a certification process and it was officially renamed Agostinho Neto International Airport. The project is now scheduled for completion on December 31, 2023. In 2017, China Development Bank reportedly also issued a loan for the New Luanda International Airport Construction Project (see Project ID#72349) but it was apparently replaced by the ICBC loan that is captured via Project ID#65402. In 2018, Bank of China (BOC) provided a $148,721,360 buyer's credit loan (BCL) for the Luanda New International Airport Railway Branch Line Project (see Project ID#65524).

Additional details

1. This project is also known as the New Luanda International Airport (NAIL) Project or New Luanda, Angola International Airport, or NAIA or Bom Jesus International Airport. The Portuguese project title is Aeroporto Internacional de Angola. The Chinese project title is 安哥拉罗安达新国际机场项目. 2. No sources explicitly state that this is a buyer's credit loan. AidData assumes this is the case for the following reasons: (1) The loan is provided to a foreign borrower, (2) the loan is denominated in USD, (3) the face value of the loan is explicitly identified in multiple official sources, (4) the loan is used to finance a commercial contract with a Chinese company, and (5) the loan was insured by Sinosure via its export buyer's credit insurance service, which is specifically used when banks are providing buyer's credit financing. 3. This ICBC loan is not included in the database of Chinese loan commitments that SAIS-CARI released in July 2020. 4. According to the World Bank’s Debtor Reporting System (DRS), the Government of Angola secured loans from official sector institutions in China worth $4,193,153,000 in 2018 (see https://www.dropbox.com/s/kwxk7hpv0dyicpi/DRS%20Official%20Commitments%20from%20China%20through%202020.csv?dl=0). AidData’s aggregate estimate is substantially lower. This discrepancy warrants further investigation.

Number of official sources

11

Number of total sources

29