China Eximbank provides $93.5 million buyer’s credit loan for Bata Five-Star Hotel Construction Project (Linked to Record ID#484)

Project narrative

On November 16, 2006, China Eximbank and the Government of Equatorial Guinea signed a $2 billion buyer’s credit facility agreement (互惠贷款) for various infrastructure projects. All subsidiary loans approved under this buyer’s credit facility agreement carry the following terms: a 5.5% interest rate, a 5 year maturity, a 2 year grace period, a 0.375% commitment fee, and a 0.5% risk guarantee (garantia del riesgo) cost. The subsidiary buyer's credit loans under the $2 billion facility were secured with (i.e. collateralized against) minimum cash balances in an escrow account opened by Government of Equatorial Guinea in China Eximbank. Under the original terms of an Account Settlement and Financing Agreement (Convenio de Liquidacion de cuentas y Financiamiento) that the parties signed on February 17, 2006, the minimum cash balance requirement was reportedly equivalent to 30 percent of the Government of Equatorial Guinea's outstanding stock of debt to China Eximbank. After the Account Settlement and Financing Agreement was amended on March 26, 2010, the borrower was expected -- at any given point in time -- to maintain a minimum cash balance in the escrow account (also known as 赤道几内亚共和国财务预算部) equivalent to the value of its next set of semi-annual principal, interest, and fee payment obligations to the lender. The borrower was also expected to deposit the cash proceeds from its oil export sales (crude oil sales revenue) to China into a payment reserve account (also known as 还款准备金 or 赤道几内亚共和国财务预算部还款准备金). More specifically, the borrower was expected to deposit the cash proceeds from six oil cargoes into the payment reserve account. In 2010, China Eximbank and the Government of Equatorial Guinea signed a subsidiary buyer’s credit loan agreement for the Bata Five-Star Hotel Construction Project. The proceeds of the loan were used by the borrower to finance a $110 million (or 51.4 billion CFA) commercial contract with China State Construction Engineering Corporation (CSCEC), which was signed on November 10, 2010. The project involved the construction of a 5-star hotel (known as Grand Hotel Bata or Gran Hotel Bata) -- with a banquet hall, a business center, a spa area, a swimming pool, a helipad, various restaurants, conference rooms, offices, and 239 hotel rooms -- along the waterfront esplanade in the city of Bata. It is located only 50 meters from the Atlantic Ocean. The building area is 50,000 square meters and the building height is 63.8 meters. It has one basement level and 16 floors above ground. Upon completion, it was expected to be the tallest building in Bata City. Construction began on July 28, 2012 and ended in November 2016.