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Overview

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

Commitments (Constant USD, 2023)$12,460,551
Commitment Year•2006Country of Activity•Kyrgyz RepublicDirect Recipient Country of Incorporation•Kyrgyz RepublicSector•CommunicationsFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Jun 9, 2006
First repayment
Jan 1, 2008
Last repayment
Dec 6, 2013

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Ultimate beneficial owners

At least 25% host country ownership

Funding agencies

State-owned Policy Banks

  • China Development Bank (CDB)

Receiving agencies

State-owned companies

  • KyrgyzTelecom

Implementing agencies

Private Sector

  • Huawei Technologies Co., Ltd.

State-owned companies

  • KyrgyzTelecom

Loan desecription

CDB provides $6.6 million loan for Digital Horizon Transformation Project

Grace period•2 yearsGrant element•9.3103%Interest rate (t₀)•7.205%Interest type•Variable Interest RateLoan tenor•6-month rateMaturity•7.5 years

Narrative

Full Description

Project narrative

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.

Staff comments

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 Record ID#70874).