China Eximbank provides $22.95 million preferential buyer’s credit for Phase 1 of Agricultural Machinery Equipment Acquisition Project (Linked to Project ID#40435, #47040, #67123)

On April 10, 2012, China Eximbank and the Government of Mongolia signed a preferential buyer’s credit (PBC) agreement for Phase 1 of the Agricultural Machinery Equipment Acquisition Project. The PBC was approved under a $500 million line of credit for various projects that was signed by the two governments on June 16, 2011 (captured in Project ID#40435). The borrowing terms of the PBC were as follows: 20 year maturity, 7 year grace period, and 2% interest rate. The proceeds of the PBC were to be used by the borrower to partially finance 85% ($22.95 million) of a $27 million purchase contract with Lovol Heavy Industry Co., Ltd, which was signed on February 2012. The purpose of the project was to facilitate the acquisition of agricultural machinery and equipment. The expected period of project implementation was April 2012 to September 2012. On September 11, 2012, a delivery ceremony for 8,000 tractors and 8,000 agricultural machinery provided by Lovol Heavy Industry Co., Ltd was held in Mongolia. China Eximbank also financed Phases 2 and 3 of the Agricultural Machinery Equipment Acquisition Project (captured in Project ID#47040 and ID#67123).

Additional details

1. The Chinese project title is 款农机设备采购项目. The Mongolian project title is “Бага оврын хөдөө аж ахуйн трактор худалдан авах I” төсөл. The Mongolian transition of the loan agreement that was signed on April 10, 2012 is Монгол Улсын Сангийн яам, БНХАУ-ын Экспорт, импорт банк хоорондын хөдөө аж ахуйн бага оврын трактор худалдан авах төслийн тусгайлсан зээлийн хэлэлцээр. 2. The face value of the PBC that supported this project is unknown. Per China Eximbank’s policy that a PBC can be used to finance up to 85% of the cost of a commercial contract, AidData has recorded the face value of the PBC (i.e. the transaction amount) as 85% of $27 million ($22.95 million). 3. The China Eximbank PBC that supported this project is not included in the Overseas Development Finance Dataset that Boston University’s Global Development Policy Center published in December 2020.

Number of official sources

7

Number of total sources

9