China Eximbank provides $60.6 million preferential buyer's credit for Ashgabat Glass Factory Construction Project (Linked to Record ID#40330, #69497)

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 Ashgabat Glass Factory was located in the northern part of Ashgabat. It was expected to become the largest plant in the region when completed, and was to be fitted with modern equipment and mainly use locally produced raw materials. Additionally, it was expected to produce 5.8 million square meters of glass (4 mm thick), 85 million units of various glass containers, and 300,000 square meters of double-glazing units, including toned glass units, annually. A silica sand enrichment plant capable of producing 100,000 tons annually was also included in the project. China National Machinery Industry Corporation (Sinomach) and Capital-Lonqji Sci-Tech Co., Ltd were contracted to implement the project. The plant was originally scheduled to be commissioned in February 2009. However, it is unclear if the project ever reached completion.