China Eximbank provides $60 million for Phase 1 of the Analog to Digital Migration Project (Linked to Record ID#57313, #57618)

Project narrative

On December 9, 2014, the Government of Mozambique ratified a $60,000,000 loan agreement with China Eximbank for the Phase 1 of the Analog to Digital Migration Project. The borrowing terms of the loan are unknown. The purpose of this project is to facilitate Mozambique’s transition from analogue to digital broadcasting systems. Phase 1 involved the digitization of a control and simulation system and the construction of 19 digital terrestrial television (DTT) transmission stations. StarTimes Media (Mozambique) Co., Ltd — a project company and joint venture of StarTimes and Focus 21 Mozambique — was responsible for implementation. A project commencement ceremony took place on April 25, 2011 and the project was ultimately completed. However, the precise date of project completion is unknown. There are some indications that the China Eximbank loan for Phase 1 of the Analog to Digital Migration Project may have financially underperformed vis-a-vis the original expectations of the lender. In 2016, several credit rating agencies downgraded the Government of Mozambique to 'selective default' or 'restricted default' status, and the World Bank and the IMF re-classified Mozambique's external debt as 'in distress.' In January 2017, the Government of Mozambique defaulted on a coupon payment for its dollar-denominated Eurobond. Then, in February 2018, the International Monetary Fund (IMF) announced that the Government of Mozambique had accumulated $710 million in arrears to external creditors and had agreed to reschedule some bilateral debt service payments with the Chinese Government. Two months later, in April 2018, Stelia Neta, a National Director at the Ministry of Finance of Mozambique revealed that the Government of Mozambique’s outstanding debt obligations to the Chinese Government amounted to $2.02 billion and the Chinese Government had agreed to extend the grace periods (and first principal repayments) on these outstanding debt obligations without changing their final maturity dates or interest rates (as captured via Record ID#66283).