China Eximbank provides preferential buyer’s credit for Meat Processing Plants and Quarantine Facilities Project (Linked to Record ID#49148)

Project narrative

On November 10, 2015, China Eximbank and the Government of Mongolia signed a general loan agreement regarding the utilization of a $1 billion preferential buyer's credit (PBC) for various projects (as captured in Record ID#49148). Under the terms of the general loan agreement, all subsidiary (individual) loan agreements for specific projects carry identical borrowing terms: 20 year maturity, 7 year grace period, 2% interest rate, 0% management fee, and 0.25% commitment fee. Then, China Eximbank and the Government of Mongolia signed a subsidiary loan (PBC) agreement for the Meat Processing Plants and Quarantine Facilities Project. The proceeds of the loan were to be used by the borrower to partially finance a $78 million EPC contract with China Machinery Engineering & Construction Corporation (SINOCONST or 中国机械工业建设集团有限公司), which was signed on April 11, 2018. The purpose of this project is to introduce new agricultural production techniques and technologies to reduce costs, increase productivity, stabilize crop yields, and protect soil fertility. It involves the construction of a meat processing plant and a complex with a quarantine zones. It also involves the supply of medium and large tractors, medium and large combines and self-propelled sprayers. Government sources indicate that the project commenced by 2019. According to a project database (http://project.zasag.mn/) maintained by the Government of Mongolia's National Development Department, this project had achieved a 45% completion rate as of 2021.