China Eximbank provides RMB 216 million government concessional loan for Trade Facilitation and Electronic Certificate Verification E-Government Project (Linked to Project ID#57077)

On September 22, 2017, Chinese Ambassador to Cameroon Wei Wenhua and Cameroonian Minister of Economy, Planning and Territorial Rehabilitation Motaze signed three cooperation agreements on behalf of their respective governments (see Project ID#57077). One of these was a framework agreement for a China Eximbank government concessional loan (GCL) worth RMB 216 million for the Trade Facilitation and Electronic Certificate Verification E-Government Project. A GCL agreement was subsequently signed by the two parties. The proceeds of the loan were to be used by the borrower to finance a $33 million commercial contract with Anhui YISHANG Digital Science Co. Ltd. (易商数码 or 安徽易商数码科技有限公司). This project entered implementation, but its precise implementation start and end dates are unknown. There are some indications that the China Eximbank loan for the Trade Facilitation and Electronic Certificate Verification E-Government Project may have financially underperformed vis-a-vis the original expectations of the lender. In January 2019, Cameroon unilaterally withheld debt service payments to China Eximbank. The lender responded by withholding new loan disbursements. Then, in July 2019, China Eximbank and the Government of Cameroon signed a debt rescheduling agreement (as captured via Project ID#88213). Under the terms of the agreement, China Eximbank agreed to reschedule 18 loans previously contracted by the Government of Cameroon — with scheduled principal repayments between July 2019 and March 2022 — by allowing the borrower to defer scheduled principal repayments between July 2019 and March 2022 to later dates but without any maturity extensions. The total amount of restructured debt was equivalent CFA 148 billion ($253 million) — or 70% of the loan principal that was scheduled for repayment between July 2019 and March 2022. Under the terms of the agreement, the Government of Cameroon agreed to repay 30% of the loan principal according to the original July 2019-March 2022 schedule (i.e. without any payment deferrals). The lender and the borrower also agreed to cancel the committed but undisbursed loan balances worth approximately CFA 10 billion (for certain loans with disbursement deadlines that had already passed). Then, in January 2020, the International Monetary Fund (IMF) classified the Government Cameroon as facing a high risk of debt distress. Eighteen months later, during an address before Cameroon’s National Assembly on June 28, 2021, the Minister of Water and Energy (MINEE) Gaston Eloundou Esommba provided an update on the ICBC-financed Bini à Warak Hydroelectric Power Plant Project. He noted that the project had been 'on hold' since November 2019 because ICBC suspended the loan agreement, even though the Government of Cameroon had already mobilized XAF 22 billion of counterpart funding. He also explained that 'the reason for this suspension is that Cameroon did not settle some of its debts towards China on time, so, it is in a cross-default situation.’

Additional details

The Chinese project title is 喀麦隆贸易便利化与电子证书验证电子政务项目 or 喀麦隆贸易便利化及电子证书验证电子政务合作项目. The French project title is Projet de facilitation du commerce international or Projet E-governement de facilitation du commerce et du système de vérification de l’E-Certification.

Number of official sources

4

Number of total sources

10