[Cancelled] China Eximbank provides $700 million loan for Phase II of the Khartoum International Airport Construction Project

On July 8, 2013, China Harbour Engineering Company (CHEC) and Sudan Airport Holdings Co. Ltd. (SAHL) signed a EPC plus Financing (F+EPC) contract worth $700 million for Phase II of the Khartoum International Airport Construction Project. Then, on January 17, 2014, CHEC signed a memorandum of understanding (MOU) pledging to obtain financing from China Eximbank for at least $680 million. Then, on December 16, 2014, China Eximbank and the Sudan Ministry of Finance signed the final concessional loan agreement worth $700 million for Phase II. This loan reportedly carried the following terms: a 20-year maturity, a 5-year grace period, and a 2.5% interest rate. The first drawdown of the loan took place in May 2016. The EPC+F contract signed in July 2013 stipulated that CHEC would complete the project within 40 months. The project involves the construction of two 400 meter runways, with a total area of 79 square kilometers. The project also involves the construction of an international hotel with 300 rooms, a conference center, a business center and a mall of 8,000 square meters. Construction was initially set to begin in 2015; however, implementation was delayed and CHEC was removed from the project for unknown reasons. According to the Global Construction Review article, Summa, a Turkish company, is now implementing Phase 2 of the project, which began in January 2019. The China Eximbank loan was almost certainly conditioned on CHEC carrying out the project, so this $700 million loan was very likely cancelled as well. It is unclear how much was disbursed prior to cancellation.

Additional details

1. The Chinese project title is 席喀土穆新国际机场项目. The Arabic project title is المرحله الثانية من مشروع مطار الخرطوم الدولي الجديد. It is also called the KNIA Project. 2. The transaction amount is not totally clear. Some sources, both official and unofficial, indicated that the Phase II EPCF contract was $700 million and others say it was $680 million. Some sources say the China Eximbank loan for Phase II was also $700 or $680 million. AidData relies on what CHEC and SAHL reported, which is that both were worth $700 million. 3. Under a typical EPC-F arrangement, China Eximbank will extend a loan to the EPC contractor but with a sovereign guarantee from the host government. Therefore, AidData has assumed that China Harbour Engineering Co., Ltd. is the borrower and that the Government of Sudan issued a sovereign guarantee in support of the China Eximbank loan. 4. JSB Market Research (see source ID 118873) reported that the January 2014 contract was for phase II as well as "ongoing preparatory works' ' for phase I. Furthermore, they claim that "In July 2015, the technical committee of the cabinet economic development sector approved the loan agreement of US$700 million for financing the project. Council of Ministers approved loan agreement of US$665 million that was signed between the Ministry of Finance, and the Chinese Export-Import Bank." JSB also claims that China Eximbank signed a loan agreement for phase III in June 2016. None of this is confirmed by official sources. 5. The amount that was disbursed though the China Eximbank loan prior to cancellation is unknown. This issue warrants further investigation.

Number of official sources

6

Number of total sources

8