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Overview

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

Commitments (Constant USD, 2023)$26,082,610
Commitment Year•2011Country of Activity•MongoliaDirect Recipient Country of Incorporation•MongoliaSector•Agriculture, Forestry, FishingFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Jan 1, 2011
Start (planned)
Apr 1, 2012
Start (actual)
Apr 10, 2012
End (planned)
Sep 1, 2012
End (actual)
Sep 11, 2012
First repayment
Dec 30, 2017
Last repayment
Dec 27, 2030

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

  • Export-Import Bank of China (China Eximbank)

Receiving agencies

Government Agencies

  • Government of Mongolia

Implementing agencies

Private Sector

  • Lovol Heavy Industry Co., Ltd (雷沃重工股份有限公司是)

Loan desecription

China Eximbank provides $22.95 million preferential buyer’s credit for Phase 1 of Agricultural Machinery Equipment Acquisition Project

Grace period•7 yearsGrant element•56.0077%Interest rate (t₀)•2%Interest type•Fixed Interest RateMaturity•20 years

Narrative

Full Description

Project narrative

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 Record 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 Record ID#47040 and ID#67123).

Staff comments

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.