China Eximbank provides $42.78 million buyer’s credit loan for Northern Road Rehabilitation Project (C11A) (Linked to Project ID#71641, #71642, #71644, #71645, #71646, #71647)

On September 9, 2010, China Eximbank and the Government of Sri Lanka signed a $42,767,678 buyer’s credit loan (BCL) agreement [No. BLA 201005] for the Northern Road Rehabilitation Project (C11A). The BCL carries the following borrowing terms: a 6-month LIBOR plus a 2% margin, a 15-year maturity, a 3-year grace period, a 0.5% management fee, a 0.7% commitment fee, and a 6% Sinosure insurance premium (exposure fee). China Eximbank disbursed an unknown amount in 2010, an unknown amount in 2011, an unknown amount in 2012, $19,158,143.75 in 2013, and $3,411,473.37 in 2014. The borrower made repayments worth $3,563,973 in 2018, $3,563,974 in 2019, $3,563,973 in 2020 and $3,563,973 in 2021. The loan's amount outstanding was $30,293,772 as of December 31, 2017, $26,729,799 as of December 31, 2018, $23,165,825 as of December 31, 2019, $19,601,852 as of December 31, 2020, $16,037,879 as of December 31, 2021, and $14,255,893 as of June 30, 2022. By early 2022, it was clear that the loan was non-performing. On April 12, 2022, the Government of Sri Lanka announced a ‘pre-emptive’ sovereign debt default, noting that it would suspend debt repayments to all external creditors other than multilateral institutions. Its decision to suspend external debt service reportedly affected all China Eximbank loans with amounts outstanding at the time of the announcement. The purpose of the Northern Road Rehabilitation Project (C11A) was to rehabilitate and improve the 42.4 km Mullaitivu-Kokkilai-Pulmodai segment of B297 Road. C11A stands for Contract 11A. Sinohydro Corporation was the contractor responsible for project implementation. The preliminary works of this project began on December 1, 2010. However, the project did not officially begin until February 14, 2011. It was originally scheduled for completion on August 14, 2013. However, it was ultimately completed and taken over by Sri Lanka’s Road Development Authority on August 13, 2013.

Additional details

1. This project is also known as Northern Road Rehabilitation Project (Mulativu-Kokkilai)-11A or the 42.4 km length of Mulativu-Kokkilai-Pulmudai Road (B297) - C11A Project. The Chinese project title is 称斯里兰卡C11标公路项目. 2. Some official sources identify the management fee as 0.3%. This issue warrants further investigation. 3. Average 6-month LIBOR in September 2010 was 0.478%. AidData has therefore estimated the all-in interest rate as 0.478% + 2.0%, or 2.478%. 4. The Government of Sri Lanka loan key number is 2010033.

Number of official sources

26

Number of total sources

27