China Eximbank provides $24.5 million preferential buyer’s credit for Phase 3 of Agricultural Machinery Equipment Acquisition Project (Linked to Project ID#73192, #47040, #40435)

In 2018, China Eximbank and the Government of Mongolia signed a $24.5 million preferential buyer’s credit (PBC) agreement for Phase 3 of the Agricultural Machinery Equipment Acquisition Project. The PBC was approved under a $500 million line of credit for various projects that was signed by the two governments on June 16, 2011 (see Umbrella Project ID #40435). The borrowing terms of the PBC were as follows: a 20-year maturity, a 7-year grace period, and a 2% interest rate. The proceeds of the PBC were to be used by the borrower to partially finance a purchase contract with Lovol Heavy Industry Co., Ltd. The purpose of the project was to facilitate the acquisition of agricultural machinery and equipment. The project was completed on May 23, 2019 when 797 sets of large tractors and combine harvesters were successfully delivered (including 180 tractors with 50-165 horsepower and haymaking equipment). Upon completion, the project was expected increase the technical capacity of the agricultural labor force by 10 percent, prepare 100,000 tons of hay and fodder, 10,000 tons of fodder per year, irrigate 9,200 hectares of crops, irrigate 450 hectares of potatoes and vegetables, and irrigate 240 hectares of fruits and vegetables.

Additional details

1. This project is also known as the Support the Production of Agricultural Products Project and the Project on supporting production of agricultural products. The Chinese project title is 采购大型农业机械项目(三期) or 中蒙合作农机采购项目. The Mongolian project title is “Хөдөө аж ахуйн бүтээгдэхүүний үйлдвэрлэлийг дэмжих” төсөл. 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. Since this loan agreement was signed in 2018, it's possible that this subsidiary loan was carried out under a general preferential buyer's credit agreement signed in 2015 (Project ID #49148). This issue warrants further investigation. 4. Phase 1 is captured in Project ID #73192, Phase 2 is captured in Project ID #47040, and Phase 3 is captured in Project ID #67123.

Number of official sources

8

Number of total sources

12