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Overview

ICBC provides $28.4 million buyer's credit for NG-ZTE Lot I & Lot II Power Project (Linked to Record ID#69392)

Commitments (Constant USD, 2023)$29,213,718
Commitment Year•2014Country of Activity•EthiopiaDirect Recipient Country of Incorporation•EthiopiaSector•EnergyFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
May 4, 2014
First repayment (originally scheduled)
Dec 20, 2017
Last repayment (originally scheduled)
Dec 20, 2025

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 Commercial Banks

  • Industrial and Commercial Bank of China (ICBC)

Receiving agencies

State-owned companies

  • Ethiopia Electric Power Corporation

Implementing agencies

State-owned companies

  • ZTE Corporation (formerly Zhongxing Telecommunication Equipment Corporation)

Guarantors

Government Agencies

  • Government of Ethiopia

Loan description

ICBC provides $28.4 million buyer's credit for NG-ZTE Lot I & Lot II Power Project

Grace period•3.635 yearsGrant element•35.2964%Interest rate (t₀)•2.9225%Interest type•Variable Interest RateLoan tenor•6-month rateMaturity•11.639 years

Narrative

Full Description

Project narrative

On May 4, 2014, the Industrial and Commercial Bank of China (ICBC) signed a $28,485,814.98 buyer's credit (loan) agreement with Ethiopia Electric Power Corporation (EEPCo) for the NG-ZTE Lot I & Lot II Power Project. The buyer's credit (loan) carried the following borrowing terms: a 11.639 year maturity, a 3.635 year grace period, and an annual interest rate of 6-month LIBOR plus a 2.6% margin. The loan's first and last scheduled principal payment dates were December 20, 2017 and December 20, 2025, respectively. Its first and last scheduled interest payment dates were December 20, 2016 and June 20, 2027, respectively. The Government of Ethiopia issued a sovereign guarantee in support of the buyer's credit. The purpose of the project was to provide electricity for ICT infrastructure. ZTE Corporation was the contractor responsible for implementation. The project was completed and put into operation in 2018.

Staff comments

1. The loan's all-in interest rate (2.923%) -- at the time it was issued -- was calculated by adding 2.6% to average 6-month LIBOR rate in May 2014 (0.323%). 2. This project is also known as the Electricity Project. 3. ICBC also financed Lot III and Lot IV (as captured via Record ID#69392). 4. Some sources identify China Development Bank (CDB) rather than ICBC as the financier. This issue warrants further investigation. 5. The loan identification number in the Government of Ethiopia’s Debt Management and Financial Analysis System (DMFAS) is 20878000 and the corresponding project name in DMFAS is ‘NG-ZTE LOT I & LOT II POWER’. See https://www.dropbox.com/scl/fi/7nrczfanixvivmiyzqx3i/MOFED-Loan-Level-Data-on-Borrowing-Terms-and-Loan-Performance-September-2024_OTHER_PUBLIC.xlsx?rlkey=5sqhh9ii4t3x8cmz0jf6s7cod&dl=0 6. As of September 2024, the Government of Ethiopia recorded the loan's all-in interest rate as 8.36% in DMFAS. See https://www.dropbox.com/scl/fi/7nrczfanixvivmiyzqx3i/MOFED-Loan-Level-Data-on-Borrowing-Terms-and-Loan-Performance-September-2024_OTHER_PUBLIC.xlsx?rlkey=5sqhh9ii4t3x8cmz0jf6s7cod&dl=0