China Eximbank provides $239.3 million preferential buyer's credit for MaryAzot Production Association Plant Reconstruction Project (Linked to Record ID#69498, #40330)

Project narrative

On August 22, 2006, the Export-Import Bank of China signed a $300 million preferential buyer's credit (PBC) framework agreement with the Government of Turkmenistan, which is captured via Record ID#40330). Borrowings under the framework agreement were to carry the following terms: a maturity of 20 years and a 3.0% interest rate Then, on January 27, 2007, CITIC International Cooperation Corporation and Turkmen National Fertilizer Co., Ltd. signed a commercial contract for the construction and renovation of the MaryAzot Production Association plant. The commercial contract was to be financed through the $300 million preferential buyer's credit framework agreement. On November 3-4, 2007, China Eximbank and the Government Turkmenistan signed for two subsidiary loan (PBC) agreements with the same borrowing terms that were specified in the August 2006 framework agreement: a $60,642,000 loan (PBC) was issued for the construction of the Ashgabat Glass Factory, a glass-manufacturing plant (as captured via Record ID#69498) and a $239,358,000 loan (PBC) was issued for the construction of new facilities and reconstruction of MaryAzot Production Association (as captured via Record ID#69497). As a source of de facto collateral, the Central Bank of Turkmenistan agreed to maintain a $50 million cash balance in an escrow account accessible to the lender. These funds were drawn from the State Fund for Development of the Oil and Gas Industry and Mineral Resources of Turkmenistan. The project consisted of a reconstruction of the MaryAzot Production Association and the construction of a carbamide plant with a planned capacity of 400,000 tons in the town of Mary. China Eximbank's loan constituted 90% of the financing necessary for the $266 million reconstruction project, while Turkmendokun joint-stock company covered the remaining 10%. CITIC International was responsible for implementing the project. However, it is unclear if the project ever reached completion.