CDB provides $6.6 million loan for Digital Horizon Transformation Project (Linked to Project ID#70874)

On June 9, 2006, China Development Bank (CDB) signed a $6,640,258 loan agreement with KyrgyzTelecom. This loan was intended to be used for the Digital Horizon Transformation Project. The loan carried the following borrowing terms: a 7-year maturity (final maturity date: June 7, 2013), a 2-year grace period, and an interest rate of 6 month LIBOR + a 1.8% margin. The loan was repaid before December 31, 2015. Huawei Technologies provided equipment for the project. Digital Horizon Transformation Project intended to upgrade the fixed network of KyrgyzTelecom from an analog network to a digital network. It provided for the parallel implementation of two projects: the modernization and development of the Bishkek telecommunication network and modernization and development of the regional telecommunication networks. It included the introduction of the expansion BGTS networks and an increase in KyrgyzTelecom's subscriber lines capacity to 250,000.

Additional details

1. The interest rate of 6-month LIBOR in 2006 was 5.490%. Therefore, the all-in interest rate was coded as 5.490% + 1.8% = 7.29%. 2. The Russian project title is Цель: Телекоммуникационный проект «Цифровое будущее». The Chinese title of the project is 吉尔吉斯斯坦电信改造项目. 3. The original pledged amount for the project is approximately $8 million. However, only $6,594,764.1 was actually received from this loan, but it may be due to the exchange rate difference loss of KGS 1,831,432.12 (see pg.19 of "KyrgyzTelecom Financial Report 2012") 4. According to the 2006 and 2007 KyrgyzTelecom Financial Reports, the loan carried the following terms: a 7-year maturity period, a grace period of 2.5 years, and an interest rate of LIBOR + 1.8%. However, the 2008 KyrgyzTelecom Financial Report reported a 7-year maturity period, a grace period of 2 years, and an interest rate of 6 month LIBOR + 1.8% (see pg.10 of "KyrgyzTelecom Financial Report 2008"). It appears that the grace period was adjusted in 2008. 5. This loan is the first project loan issued by China Development Bank through commercial operation within the framework of the Shanghai Cooperation Organization since the establishment of the SCO Bank Consortium. 6. This project was linked to a $3.5 million loan from CDB for Digital Horizon Transformation Project in November 2007 (see Project ID#70874).

Number of official sources

8

Number of total sources

8