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Overview

China Eximbank provides $85 million loan for Pointe Noire-Malélé Section of the Pointe-Noire-Brazzaville Road (RN1) Construction Project (Linked to Record ID#60219, ID#72780, ID#72781, ID#72782, ID#369)

Commitments (Constant USD, 2023)$141,232,985
Commitment Year•2007Country of Activity•CongoDirect Recipient Country of Incorporation•CongoSector•Transport And StorageFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Jan 1, 2007
Start (actual)
May 1, 2008
End (actual)
Dec 22, 2011
First repayment
Dec 31, 2010
Last repayment
Jun 28, 2023

Geospatial footprint

Map overview

Visualizes the AidData-provided feature geometry for this project.

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This project involved the construction of a 55 km road segment that runs from Pointe-Noire to Malélé. More detailed locational information can be found at https://www.openstreetmap.org/directions?engine=fossgis_osrm_car&route=-4.4213%2C12.1397%3B-4.7485%2C11.8523

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

  • Export-Import Bank of China (China Eximbank)

Receiving agencies

Government Agencies

  • Government of Republic of Congo

Implementing agencies

State-owned companies

  • China State Construction Engineering Corporation (CSCEC)

Collateral providers

State-owned companies

  • Société Nationales des Pétroles Congolais (SNPC)

Loan desecription

China Eximbank provides $85 million loan for Pointe Noire-Malélé Section of the Pointe-Noire-Brazzaville Road (RN1) Construction Project

Grace period•4 yearsGrant element•58.3684%Interest rate (t₀)•0.25%Interest type•Fixed Interest RateMaturity•16.5 years

Collateral

This China Eximbank loan -- and other subsidiary China Eximbank loans approved under a June 19, 2006 framework agreement that was renewed/extended in 2012 -- was collateralized against cash proceeds from SNPC oil export sales to Chinese importers (through an offtake agreement), which were deposited in a China Eximbank-controlled escrow account. The Republic of Congo was required to maintain a minimum cash balance in the escrow account equivalent to approximately 20% of its total outstanding debt to China Eximbank. The cash balance in the China Eximbank-controlled escrow account was $534,238,226 (CFA 272,846,414,000) in 2011, an unknown amount in 2012, an unknown amount in 2013, an unknown amount in 2014, an unknown amount in 2015 (equivalent to 26% of SNPC oil sales in 2015), $281,560,937 in 2016 (equivalent to 7,558,672 barrels of oil or 32% of SNPC oil sales in 2016), $338,285,020 in 2017 (equivalent to 23.25% of SNPC oil sales in 2017), $513,780,005 in 2018 (equivalent to 7,411,386 barrels of oil, eight oil cargoes, or 30.22% of SNPC oil sales in 2018), $523,547,187 in 2019 (equivalent to 8,228,065 barrels of oil, 9 oil cargoes, or 32.56% of SNPC oil sales in 2019), $266,659,781 in 2020 (equivalent to 6,349,813 barrels of oil, 7 oil cargoes, or 31.61% of SNPC oil sales in 2020), $319,164,228 in 2021 (equivalent to 4,585,056 barrels of oil or 21.4% of SNPC oil sales in 2021), and $356,343,684 in 2022 (equivalent to 3,634,514 barrels of oil 13.09% of SNPC oil sales in 2022).

Narrative

Full Description

Project narrative

On June 19, 2006, China Eximbank and the Republic of Congo signed a $1.6 billion loan framework agreement — also known in the Republic of Congo as the “strategic partnership” (“partenariat stratégique”) — that allowed the Republic of Congo to obtain China Eximbank loans for infrastructure projects through a securitization mechanism: Société Nationales des Pétroles Congolais (SNPC)—the country’s state-owned oil company — agreed to deposit a portion of the cash proceeds from its oil exports into an escrow account that is controlled by China Eximbank. This framework agreement (captured via Record ID#60219) was ratified on October 26, 2006. Four of the subsidiary loans that were approved through the framework agreement supported Phase 1 of the Pointe-Noire-Brazzaville Road (RN1) Construction Project. They included an $85 million China Eximbank loan in 2007 for the Pointe Noire-Malélé Section of the Pointe-Noire-Brazzaville Road (RN1) Construction Project (captured in Record ID#68874), an $84 million China Eximbank loan for the Malélé-Les Saras Section of the Pointe-Noire-Brazzaville Road (RN1) Construction Project (captured in Record ID#72780), an $84 million China Eximbank loan in 2007 for Les Saras-Mvou Section of the Pointe-Noire-Brazzaville Road (RN1) Construction Project (captured in Record ID#72781), and a $74 million China Eximbank loan in 2007 for the Mvou-Dolisie Section of the Pointe-Noire-Brazzaville Road (RN1) Construction Project (captured in Record ID#72782). The estimated borrowing terms of these loans are as follows: a 0.25% interest rate, a 20-year maturity, and a 5-year grace period. As of 2014, USD 85 million had been disbursed. The (principal) amount outstanding under these four loans was $57,483,425 as of December 31, 2019. The Pointe Noire-Malélé Section of the Pointe-Noire-Brazzaville Road (RN1) Construction Project involved the construction of a 55 km road segment that runs from Pointe-Noire to Malélé. The Malélé-Les Saras Section of the Pointe-Noire-Brazzaville Road (RN1) Construction Project involved the construction of a 37 km road segment that runs from Malélé to Les Saras. The Les Saras-Mvou Section of the Pointe-Noire-Brazzaville Road (RN1) Construction Project involved the construction of a 36 km road segment that runs from Les Saras to Mvou (Mvouti). The Mvou-Dolisie Section of the Pointe-Noire-Brazzaville Road (RN1) Construction Project involved the construction of a 45 km road segment that runs from Mvou (Mvouti) to Dolisie. China State Construction Engineering Corporation Ltd. was the contractor responsible for all four of these road sections. Phase 1 construction began in May 2008 and was opened to traffic in December 22, 2011. Phase 2 of the Pointe-Noire-Brazzaville Road (RN1) Construction Project, which was also financed by China Eximbank, involved the construction of the 375 km road from Dolisie to Brazzaville. It is captured via Record ID#369. Phase 2 started construction on December 22, 2011 and was opened to traffic on March 1, 2016. The Pointe-Noire-Brazzaville Road (RN1) is said to have shortened a trip that previously could take over a week down to a day or less. Furthermore, as of 2021, the road was the Republic’s only passage connecting Brazzaville and Pointe Noire that ran from east to west.

Staff comments

1. Phase 1 is also known as the Pointe Noire-Dolisie (RN1) Road Construction Project. The Chinese project title is 承建的刚果（布）一号公路一期工程 or 即中建总公司1号公路. 2. According to a 2019 report published by the Republic of Congo’s National Assembly, all loans approved under the June 19, 2006 framework agreement had an interest rate of 0.25%, maturities between 13 years and 20 years, and grace periods between 3 and 5 years. Therefore, since the actual maturities and grace periods of the four loans that supported Phase 1 of the Pointe-Noire-Brazzaville Road (RN1) Construction Project are unknown, AidData imputes a maturity value of 16.5 years (the middle of the distribution of the maturity range) as an approximation and a grace period value of 4 years (the middle of the grace period distribution) as an approximation. 3. In the database of Chinese loan commitments that SAIS-CARI released in July 2020, it identifies a single $552 million China Eximbank loan for Phase 1 of the Pointe-Noire-Brazzaville Road (RN1) Construction Project. AidData records four separate China Eximbank loans — for the Pointe Noire-Malélé Section, Malélé-Les Saras Section, Les Saras-Mvou Section, and Mvou-Dolisie Section of Phase 1 of the Pointe-Noire-Brazzaville Road (RN1) Construction Project — that the Congolese authorities disclosed to the World Bank and the World Bank reported in its September 2014 Republic of Congo Economic Update publication.