China Eximbank provides $42.51 million buyer’s credit loan for Northern Road Rehabilitation Project (C11B) (Linked to Project ID#71641, #71642, #71643, #71645, #71646, #71647)

On September 9, 2010, China Eximbank and the Government of Sri Lanka signed a $42,509,700 buyer’s credit loan (BCL) agreement [No. BLA 201006] for the Northern Road Rehabilitation Project (C11B). 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, $11,976,057.06 in 2013, and $5,854,555.84 in 2014. The borrower made repayments worth $3,542,475 in 2018, $3,542,476 in 2019, $3,542,475 in 2020 and $3,542,475 in 2021. The loan's amount outstanding was $31,882,275 as of December 31, 2017, $28,339,800 as of December 31, 2018, $24,797,324 as of December 31, 2019, $21,254,849 as of December 31, 2020, $17,712,374 as of December 31, 2021, and $15,941,138 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 (C11B) was to rehabilitate and improve the 52.6 km Oddusudan-Nedunkerny (B334) Road and Mulativu-Puliyankulama (B296) Road. C11B stands for Contract 11B. Sinohydro Corporation was the contractor responsible for project implementation. The preliminary works of the project commenced on December 1, 2010. However, the project did not officially begin until August 15, 2011. It was originally scheduled to be completed by February 14, 2014. But the project was ultimately completed and handed over to Sri Lanka’s Road Development Authority on June 27, 2014.

Additional details

1. This project is also known as Northern Road Rehabilitation Project - 11B. 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 2010032.

Number of official sources

24

Number of total sources

25