China Eximbank provides $758.7 million buyer's credit loan for Port of Caio Construction Project

Project narrative

On November 29, 2016, China Eximbank and the Government of Angola entered into a $932 million facility (loan) agreement for the Port of Caio Construction Project. The face value of the loan was subsequently reduced to $758.7 million. The loan has a maturity of 15 years, and the Government of Angola is not required to make any repayments under the facility until the end of the disbursement period, which ends sixty months after the effective date of the facility (meaning the grace period is 5 years). The Government of Angola did not issue a sovereign guarantee for the loan, but China Export & Credit Insurance Corporation (Sinosure) provided an export credit insurance policy for the facility and Eximbank provided 85% of the premium. The proceeds of the loan were used to finance up to 85% of the price of a commercial contract between Caioporto, S.A. and China Road and Bridge Corporation (CRBC). Caioporto, S.A. is a special purpose vehicle (SPV) established and owned by the Government of Angola’s Sovereign Wealth Fund (Fundo Soberano de Angola) for the financing, construction and management of a deep-water commercial port in the village of Caio within Cabinda Province. The only equity in this project was provided by a $180 million investment from Angola's Fundo Soberano de Angola (FSDEA) and an unknown investment amount by Quantum Global Group, an investment group founded by Swiss-Angolan Jean-Claude Bastos de Morais. The Port of Caio Construction Project is being implemented in multiple phases. The first phase involves the construction a 630 meter seaport wall, a 2 km bridge and access pier to the seaport terminal with 2km length, a 180 meter access channel, and a 200 meter-wide, 14 meter-deep docking basin. The second phase involves the construction of a 200 meter-wide, 18 meter-deep access channel and a docking pier that is 1,130 meters long and 16 meters deep with the capacity to dock 4 large ships simultaneously and welcome some of the world’s largest ships. Upon completion, the port will have the capacity to move about 60 containers per hour. The project will cover an area of over 2,500 hectares, where customs facilities, workshops with port support and ship repair services, warehouses and commercial establishments will be built. Phase 1 construction began in June 2017; however, as of March 2022, no funds had been disbursed through the China Eximbank facility agreement. Then, on May 30, 2018, the contract for the project was halted by Presidential Order No. 66/18, effectively terminating the execution of the port project between Caioporto, S.A. and Angola’s Ministry of Transport. A year later, Presidential Order No. 166/19 halted the commission for the termination of the port project (in effect, undoing Presidential Order No. 66/18 and reactivating the project) and authorized the Angolan Minister of Transport to grant one of the port terminals of Porto do Caio to Caioporto, S.A. to guarantee the implementation of the project. Presidential Order No. 166/19 also made Caioporto, S.A. entirely owned by the Government of Angola’s Sovereign Wealth Fund (Fundo Soberano de Angola) after Jean-Claude Bastos de Morais (who was removed from his position at Fundo Soberano de Angola on suspicions of financial mismanagement) returned his assets to the Angolan Government. Construction was halted again in early 2020 due to the COVID-19 pandemic but it resumed in August 2020. Dredging activity resumed on September 13, 2022.