CDB provides $196 million loan to Habib Bank Limited for energy projects and offshore operations (Linked to Project ID#96090)

On April 26, 2016, China Development Bank (CDB) announced that it would provide Habib Bank Limited (HBL) — a commercial bank in Pakistan — with $300 million in project financing for certain projects in Pakistan and $200 million for offshore working capital financing needs. At the time, HBL had recently received a license to open a branch in China. Then, on June 15, 2017, CDB and HBL signed a $196 million loan agreement to expand HBL’s offshore operations and to finance energy projects. The loan carried the following borrowing terms: a 3-year maturity, a 6 month grace period, and an interest rate of LIBOR plus a 2.45% margin. The borrower was responsible for making repayments in six semi-annual installments between December 2017 and June 2020. Loan disbursements amounted to $188 million in 2018. HBL reportedly began making repayments in December 2017. Then, in 2019, CDB and HBL signed a $300 million long-term loan agreement to enable HBL to on-lend to its customers. The first loan disbursement (drawdown) took place on January 31, 2019. Additional disbursements (drawdowns) were permitted until January 31, 2023. Cumulative disbursements amounted to $62.890 million in 2019, $165.975 million in 2020, and $170.975 million in 2021. The loan carried a 14-year maturity, a 4-year grace period, and an interest rate of LIBOR plus an unspecified margin. The borrower is responsible for making semi-annual repayments between January 31, 2023 and January 31, 2033.

Additional details

1. AidData has estimated the all-in interest rate by adding 2.45% to average 6-month LIBOR in June 2017 (1.16%). 2. HBL is the only bank in Pakistan having branches in China (Urumqi) and in Gwadar, Pakistan. The bank has been working actively in China with plans to leverage maximum opportunities of projects under China Pakistan Economic Corridor (CPEC).

Number of official sources

4

Number of total sources

7