Project ID: 777

China Eximbank provides RMB 443.7 million government concessional loan for Bingu National Stadium Construction Project (Linked to Project ID#57896)

Commitment amount

$ 81417238.38307784

Adjusted commitment amount

$ 81417238.38

Constant 2021 USD

Summary

Funding agency [Type]

Export-Import Bank of China (China Eximbank) [State-owned Policy Bank]

Recipient

Malawi

Sector

Other social infrastructure and services (Code: 160)

Flow type

Loan

Level of public liability

Central government debt

Financial distress

Yes

Infrastructure

Yes

Category

Intent

Development (The next section lists the possible statuses.)

Commercial

Development

Representational

Mixed

Financial Flow Classification

ODA-like (The next section lists the possible statuses.)

Official Development Assistance

Other Official Flows

Vague (Official Finance)

Flows categorized based on OECD-DAC guidelines

Project lifecycle

Status

Completion (The next section lists the possible statuses.)

Pledge

Commitment

Implementation

Completion

Suspended

Cancelled

Milestones

Commitment

2013-01-30

Actual start

2013-07-01

Actual complete

2017-01-28

Geography

Description

In 2009, China Eximbank agreed in principle to issue a loan to Malawi towards construction of a modern national stadium, the Bingu National Stadium. Then, on January 30, 2013, China Eximbank and the Government of Malawi signed a government concessional loan (GCL) agreement [CHINA EXIMBANK GCL NO. (2013) 16 TOTAL NO. (461)A] worth RMB 443,788,000 for the Malawi National Stadium Construction Project. The loan agreement was then amended on May 17, 2013. The borrowing terms of the loan were as follows: a 20 year maturity (final maturity date: March 21, 2033), a 7 year grace period (first repayment date: September 21, 2020), an interest rate of 2%, and a 0.50% management fee. The loan's principal amount outstanding was RMB 392,581,692.30 as of June 2023. As of 2022, the borrower expected to make principal repayments each year worth RMB 34,137,538.46 until 2033. The purpose of the project was to construct Bingu National Stadium. The stadium has a seating capacity of 40,000 people, a standard natural grass football area, and 10 synthetic tracks. It has two major areas, the larger being the reinforced-concrete stands, surrounded by a vast, circular promenade. The seating bowl has two tiers along the west and east sides, divided by single strips of private boxes, 60 in total (2 presidential, 2 diplomatic and 56 other).The second part is its vast roof, which has a height of 56 meters. Beneath the roof there's room for all FIFA-required facilities as well as offices, a medical center, police station, and two tanks holding up to 20,000 liters of rainfall water. Spaces include two VVIP and two VIP lounges; four dressing rooms; two referee rooms; five event management rooms, and three management rooms. There are also eight shopping spaces, two lifts for VVIPs, 800 toilets, and a 400-car parking space among other facilities. Planning for the national stadium was tied up in debates of where to locate the stadium, as there was a move to change its location from Lilongwe to Blantyre to redistribute aid projects away from the capital. However, Lilongwe was ultimately selected as the site of the stadium after the election of President Joyce Banda. More specifically, the stadium is located in Area 48 in Lilongwe. Its locational coordinates are 13.9438119°S 33.7530957°E. Beijing Institute of Architectural Design designed the stadium with input from Malawian experts, while construction was undertaken by Anhui Foreign Economic Construction Group. To reduce the overall cost of the project, any non-obligatory equipment, like electronic ticketing system, was scrapped and up to 900 workers were Chinese (total workforce of approximately 2,000). The project started on July 1, 2013 and was it completed on November 30, 2015, lasting 29 months. The stadium began operations in January 28, 2017 after having difficulty connecting to water and electricity lines. There are some indications that the China Eximbank loan for the Bingu National Stadium Construction Project has financially underperformed vis-a-vis the original expectations of the lender. In 2021, Malawi's Minister of Finance announced that ‘in 2020/21 FY, Government [of Malawi] requested temporary debt service suspension from bilateral creditors. This is in line with the Extended Debt Service Suspension Initiative (DSSI). The key feature of the Extended DSSI is that the repayment period of the principal and interest payments falling due between 1st January 2021 to 30th June 2021 will be made in five years with one-year grace period. This entails that in 2021/22 FY, the suspended debt service will be within the grace period.’ Then, in November 2022, the World Bank and the IMF judged the Government of Malawi’s external debt and overall public debt to be ‘in distress’—a downgrade from the previous World Bank-IMF Debt Sustainability Analysis (DSA). In July 2023 correspondence with AidData’s Executive Director, the Government of Malawi revealed that it was in negotiations with China Eximbank about rescheduling all of their loans with amounts outstanding. The Government of Malawi proposed principal payments worth RMB 61 million and interest payments worth RMB 26 million in 2023, interest payments worth RMB 26 million and principal payment deferrals in 2024 and 2025, RMB 50 million in principal and interest payments in 2026, RMB 90 million in principal and interest payments in 2027, RMB 89 million in principal and interest payments in 2028, RMB 88 million in principal and interest payments in 2029, RMB 87 million in principal and interest payments in 2030, RMB 86 million in principal and interest payments in 2031, and RMB 85 million in principal and interest payments in 2032. China Eximbank proposed principal payments worth RMB 61 million and interest payments worth RMB 26 million in 2023, interest payments worth RMB 26 million and principal payment deferrals in 2024 and 2025, RMB 148 million in principal and interest payments in 2026, RMB 299 million in principal and interest payments in 2027, RMB 294 million in principal and interest payments in 2028, RMB 228 million in principal and interest payments in 2029, RMB 121 million in principal and interest payments in 2030, RMB 101 million in principal and interest payments in 2031, and RMB 82 million in principal and interest payments in 2032. As of July 2023, a debt rescheduling deal had not yet been reached by the parties.

Additional details

1. In July 2023, the Government of Malawi's Ministry of Finance informed AidData that China Eximbank ultimately did not approve its request from temporary debt service suspension via DSSI. On this point, also see https://datatopics.worldbank.org/dssitables/deferrals/annual/MWI. 2. The national stadium project was agreed upon following the signing of a pact between the two countries towards construction of the Kwacha Presidential Hotel, International Conference Centre and Presidential Villas (see Project ID#776). 3. In 2015, the Chinese Government provided a $1 million grant for technical maintenance services at the stadium (as captured via Project ID#57896). 4. Upon completion of the stadium, the Ministry of Sports and Culture brought in two landscape contractors to plant the immediate area surrounding the stadium. 5. The Chinese project title is 马拉维国家体育场. 6. The Government of Malawi loan instrument ID number is 2013001. 7. SAIS-CARI identifies the loan commitment year as 2012. AidData identifies the loan commitment year as 2013 based on the loan agreement itself, which was signed on January 30, 2013 and amended on May 17, 2013.

Number of official sources

15

Number of total sources

33

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Details

Cofinanced

No

Direct receiving agencies [Type]

Government of Malawi [Government Agency]

Implementing agencies [Type]

Beijing Institute of Architectural Design (Group) Co., Ltd. (BIAD) [State-owned Company]

Anhui Foreign Economic Construction Group Co., Ltd. (AFECC) [Private Sector]

Loan Details

Maturity

20 years

Interest rate

2.0%

Grace period

7 years

Grant element (OECD Grant-Equiv)

51.7588%

Bilateral loan

Government Concessional Loan

Investment project loan