China Eximbank provides $44.43 million preferential buyer’s credit for 114 km Tosontsengel-Uliastai Road Construction Project

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: a 20 year maturity, a 7 year grace period, a 2% interest rate, a 0% default (penalty) interest rate, a 0% management fee, and a 0.25% commitment fee. Then, on July 14, 2016, China Eximbank and the Government of Mongolia signed a $44,433,534.39 subsidiary loan (PBC) agreement [CHINA EXIMBANK PBC 2016 (21) TOTAL (409)] for the 114 km Tosontsengel-Uliastai Road Construction Project. The borrower was responsible for making 26 equal, semi-annual repayments (worth $1,708,982.09) after the expiration of the loan’s grace period. The proceeds of the PBC were to be used by the borrower to finance two contracts: an EPC (turnkey) contract between Xinjiang Beixin Road & Bridge Group Co., Ltd. and Mongolia’s Ministry of Roads and Transportation Development, which was signed on April 15, 2016; and a $2.2 million supervision and consulting contract between Mongolia’s Ministry of Roads and Transportation Development and Guangzhou Wanan Construction Supervision Co., Ltd, which was signed on May 18, 2016. The purpose of the project was to construct a 114 km paved road (A1102) from Tosontsengel to Uliastai (Улиастай). The road was designed to be 7 meters wide, 5 cm thick asphalt paved, and 1.5 meters wide gravel curbs on both sides. It begins from the center of Tosontsengel soum within the Zavkhan aimag to the 67km checkpoint within the Uliastai soum (at the foot of Zagastai pass). Xinjiang Beixin Road & Bridge Group Co., Ltd. was the general EPC contractor responsible for implementation. However, “Diamond Road” LLC, “Enkh Tugul Bekh” LLC, and “Dlubu XP” LLC were also involved in implementation as subcontractors. Guangzhou Wanan Construction Supervision Co., Ltd was responsible for project supervision. The project commenced on July 26, 2017 and the road was officially commissioned and put into use on August 8, 2019.