China Eximbank provides $59.8 million preferential buyer’s credit for 129.4 km Bayankhongor-Baidrag Bridge Road Construction Project

On November 10, 2015, China Eximbank and the Government of Mongolia signed a general loan agreement regarding the utilization of a $1 billion preferential buyer's credit (PBC) for various projects (as captured in Project ID#49148). Under the terms of the general loan agreement, all subsidiary (individual) loan agreements for specific projects carry identical borrowing terms: a 20 year maturity, a 7 year grace period, a 2% interest rate, a 0% default (penalty) interest rate, a 0% management fee, and a 0.25% commitment fee. Then, on July 14, 2016, China Eximbank and the Government of Mongolia signed a $59,792,833.10 subsidiary loan (PBC) agreement [CHINA EXIMBANK PBC 2016 (20) TOTAL (408)] for the 129.4 km Bayankhongor-Baidrag Bridge Road Construction Project. The borrower was responsible for making 26 equal, semi-annual repayments (worth $2,299,724.35) after the expiration of the loan’s grace period. The borrower was expected to use the proceeds of the loan to finance 100% of the $56,785,696.10 cost of a (1) commercial (construction) contract between Mongolia’s Ministry of Road and Transport and Shanghai Construction Group Co., Ltd. (signed on April 15, 2016) and a (2) $3,007,137 commercial (supervision) contract between Mongolia’s Ministry of Road and Transport and Guangzhou Wanan Construction Supervision Co., Ltd. (signed on May 18, 2016). The purpose of the project was to construct a new 129.4 kilometer paved road from the center of Bayankhongor soum to Baidrag Bridge in Bayankhongor aimag. The grade 3 road is 7 meters wide and 6 cm thick asphalt paved with a 1.5 meters wide gravel embankment on both sides. Shanghai Construction Group Co., Ltd. was the general EPC contractor responsible for project implementation. However, a number of Mongolia subcontractors (including Ikh Mongol, Ikh Bogd Zam, DRJ and Tugs Zam LLC) were also involved in implementation. Guangzhou Wanan Construction Supervision Co., Ltd. was responsible for project supervision. A project commencement ceremony took place on June 10, 2017. The road was officially open to traffic on August 17, 2019.

Additional details

1. The Chinese project title is 巴彦洪格尔省129.4公里省际公路项目. The Mongolian project title is БАЯНХОНГОР-БАЙДРАГИЙН ГҮҮР ЧИГЛЭЛИЙН 129.4 КМ ХАТУУ ХУЧИЛТТАЙ АВТО ЗАМЫН ТӨСӨЛ”-ИЙН. 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 PBC (loan) agreement can be accessed in its entirety via https://www.dropbox.com/s/893iwvl9pnqka1c/Mongolia%202016%20China%20Eximbank%20Loan%20for%20Bayankhongor-Baidrag%20Bridge%20Direction%20129.4%20km%20Road%20Construction%20Project.pdf?dl=0

Number of official sources

11

Number of total sources

20