Chinese Government provides interest-free loan for Karonga-Chitipa Road (Bingu Highway) (Linked to Project ID#774)

On March 17, 2008, the Chinese Government issued a $70 million grant (captured via Project ID#774) and an interest-free loan (captured via Project ID#69242) for the construction of the completion of the Karonga-Chitipa Road (also known as Bingu Highway) in the northern region of Malawi. The People's Republic of China (China) replaced the original financier, the Republic of China (Taiwan), when Government of Malawi ended its diplomatic relations with Taiwan. The face value of the interest-free loan is unknown, but it carried the following borrowing terms: a 10 year grace period, a 20 year maturity, and a 0% interest rate. The project involved the completion of the construction of 101 km Karonga-Chitipa Road (M26) to Bitumen Standard Class I road. China Road and Bridge Corporation (CRBC) was the contractor responsible for the construction of the first 13 km section between Karonga and Mwesya bridge for a total contract value of $70 million. The project design consultant was China Highway Planning and Design Institute (HPDI). Project implementation commenced on March 17, 2008 and the originally expected completion date was April 17, 2010, which was later revised to October 30, 2011. The expected completion date was further revised to June 30, 2012 because of shortage of diesel and increased quantities of work items. The expected project completion date was again changed from June 30, 2012 to December 31, 2012 because of diesel shortage and change in pavement design from natural gravel to crushed stone. An official opening ceremony for the road was held on January 7, 2013. The road reportedly benefitted citizens of Chitipa, in the northern border district of Malawi, who formerly would have spent 5 hours journeying to Karonga. The trip subsequently took 90 minutes and saved time for those who needed the road to do business or access services not available in Chitipa.

Additional details

1. The loan may be part of a 2011 financial agreement between China and Malawi which includes an interest-free loan of K1.2 billion for projects to be identified jointly by the 2 governments (loan facility has a grace period of 10 years and maturity of 10 years), as reported by the Nyasa Times. 2. The exact length of the road is unclear, as the different sources have said 100.7 km, 101 km, 106 km, and 109 km. 3. This loan is not included in the SAIS-CARI database of Chinese loan commitments that was released in 2020 and re-released in 2021.

Number of official sources

5

Number of total sources

10