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Overview

CDB provides $500 million buyer's credit loan to Megafon for the purchase of Huawei products (CDB VI) (Linked to Record ID#66954)

Commitments (Constant USD, 2023)$568,248,574
Commitment Year•2011Country of Activity•RussiaDirect Recipient Country of Incorporation•RussiaSector•CommunicationsFlow Type•Loan

Status

Project lifecycle

Implementation

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Jun 1, 2011
Last repayment (originally scheduled)
May 30, 2016

Geospatial footprint

Map overview

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Megafon headquarters is located at 41 Oruzheyniy lane, Moscow 127006, Russia. More detailed locational information can be found at https://www.openstreetmap.org/node/6193233295.

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Ultimate beneficial owners

At least 25% host country ownership

Funding agencies

State-owned Policy Banks

  • China Development Bank (CDB)

Receiving agencies

Private Sector

  • MegaFon PJSC

Implementing agencies

Private Sector

  • Huawei Technologies Co., Ltd.
  • MegaFon PJSC

Loan description

CDB provides $500 million buyer's credit loan to Megafon for the purchase of Huawei products (CDB VI)

Interest rate (t₀)•2.80263%Interest type•Variable Interest RateMaturity•5 years

Narrative

Full Description

Project narrative

In June 2011, CDB signed two $500 million buyer's credit facility agreements with Megafon -- known as CDB VI (captured via Record ID#66939) and CDB VII (captured via Record ID#66954) -- to finance the purchase of Huawei equipment. The CDB VI facility carried an interest rate of LIBOR plus a 2.4% margin and a 5-year maturity (final maturity date: June 2016.) As of December 31, 2013, $243 million was drawn down from the facility. The remaining funds, $257 million, were not used when the facility term expired.

Staff comments

1. CDB has provided several loan facilities to MegaFon. See Record ID#66854 for the first CDB credit facility to Megafon (CDB I), Record ID#66916 for CDB II, Record ID#66917 for CDB III, Record ID#66936 for CDB IV, Record ID#66953 for CDB V, and Record ID#66954 for CDB VII. 2. The average 6-month LIBOR in June 2011 was 0.398%, so the all-in interest rate was estimated as 0.398 + 2.4 = 2.798%. 3. This facility is also known as "China Development Bank VI".