ICBC provides $16.7 million loan for National Information Highway Fiber Optic Network Project (linked to #85323, #85328, #85329, #85333, #85335, #85339)

On April 28, 2006, Cambodia Fibre Optic Communication Network Company (CFOCN) — a project company owned by HyalRoute Communication Group Limited — was established to finance design, implement, and maintain the National Information Highway Fiber Optic Network Project. Then, on December 11, 2007, CFOCN obtained a 35-year, land optic cable investment and operation license from the Ministry of Posts and Telecommunications of Cambodia. In 2015, China Eximbank issued a $50 million buyer’s credit loan to CFOCN for the National Information Highway Fiber Optic Network Project. CFOCN secured a corporate guarantee from HyalRoute Communication Group Limited for the loan from China Eximbank. It also purchased buyer’s credit insurance from Sinosure for the China Eximbank loan. The project involved the construction of an approximately 2,000 km fibre optic backbone network in Cambodia and it was implemented in two phases. The first phase of the project involved the laying of 1337 kilometers of fiber optic cable to serve 127,000 users. The second phase of the project involved the laying of 963 kilometers of fiber optic cable to serve 87,000 users. Powerchina Huadong Engineering Corporation was the EPC contractor responsible for the implementation of both phases. It signed an EPC contract for Phase 2 with CFOCN on June 19, 2014 and an EPC contract for Phase 1 with CFOCN on an earlier (unknown) date. Phase 1 was implemented between July 25, 2014 to December 10, 2014, and Phase 2 was implemented between January 17, 2015 to May 20, 2015. CFOCN also secured 6 additional loans to facilitate the implementation of the project: a $40 million buyer’s credit loan from China Development Bank (CDB), a $15 million loan from ICBC Phnom Penh Branch, a $16,750,000 loan from ICBC Phnom Penh Branch, a $15 million loan from ICBC Phnom Penh Branch, a $70 million loan from the ICBC Beijing Head Office, and a $15 million loan from Bank of China (BoC) Phnom Penh Branch: - CFOCN purchased buyer’s credit insurance from Sinosure for the $40 million loan from CDB (captured in Project ID#85328). The borrower also pledged fiber optic network assets to CDB as a source of collateral. - The $15 million loan from ICBC Phnom Penh Branch (captured in Project ID#85329), the $16,750,000 loan from ICBC Phnom Penh Branch (captured in this project), and the $15 million loan from ICBC Phnom Penh Branch (captured in Project ID#85333) were all backed by corporate guarantees from HyalRoute Communication Group Limited and pledges of fiber optic network assets as sources of collateral. - The $70 million loan from the ICBC Beijing Head Office (captured in Project ID#85335) did not benefit from a guarantee or a formal source of security collateral. - The $15 million loan from Bank of China (BoC) Phnom Penh Branch (captured in Project ID#85339) also did not benefit from a guarantee or a formal source of security (collateral). CFOCN is also involved in a $174 million project to construct and operate submarine cables and a landing station in southwestern Preah Sihanouk Province, which is partially financed by AIIB; however, it is unclear if any Chinese state-owned banks are involved. This issue merits further investigation.

Additional details

1. The Chinese project title is 柬埔寨光纤信息传输网络建设项目 or 國家開發銀行廣西省分行“柬埔寨光縴建設”項目 or “柬埔寨光縴建設”. 2. HyalRoute Communication Group Limited is a Singapore-based company that is owned by HyalRoute Group, a Shenzhen-headquartered telecom infrastructure company. 3. Only the commitment year of the China Eximbank loan (2015) is known; therefore, AidData has set the commitment years for the CDB, BoC, and ICBC loans to 2014 (the first year of construction) for the time being.

Number of official sources

21

Number of total sources

31