Chinese Government provides interest-free loan via RMB 40 million ETCA for Phase 1 of Telecommunications Equipment Acquisition Project (Linked to Record ID#40332, #57778, #42014, #88175)

Project narrative

In December 2002, the Chinese Government and the Government of Turkmenistan signed an Economic and Technical Cooperation Agreement (ETCA) committing RMB 40 million through a grant (captured via Record ID#88175) and an interest-free loan (captured via Record ID#88176). Then, in June 2004, Turkmenistan’s Ministry of Telecommunications and Huawei Technologies Co., Ltd. signed an RMB 40 million ($4.8 million) commercial contract for Phase 1 of the Telecommunications Equipment Acquisition Project. The commercial contract was fully financed with the ETCA proceeds committed in December 2002. In 2005, Turkmen Prime Minister Atamyrat Berdiyev announced that the Chinese Government was planning to give the Government of Turkmenistan another soft credit line worth RMB 650 million to carry out telecommunications projects (captured via Record ID#42014). Then, in April 2006, the Governments of Turkmenistan and the Chinese Government signed a preferential loan framework agreement that set out the terms and conditions of borrowing for these telecommunications project. On December 13, 2006, the Export-Import Bank of China (China Eximbank) and the Government of Turkmenistan signed an RMB 200 million government concessional loan for Phase 2 of a Telecommunications Equipment Acquisition Project (captured via Record ID#40332). The borrowing terms of the loan included a 20.25-year maturity and a 3% interest rate, but its grace period is unknown. Then, in December 2009, China Eximbank and the Government of Turkmenistan signed an RMB 450 million government concessional loan for Phase 3 of a Telecommunications Equipment Acquisition Project (captured via Record ID#57778). The borrowing terms of the loan included a 20.25-year maturity and a 3% interest rate, but its grace period is unknown. The purpose of Phase 1 was to establish a radio-telephone communication network in Ashgabat by modernizing inter-station communication links. Under the terms of its Phase 1 contract, Huawei Technologies Co., Ltd. also agreed to build the Euro-Asian fiber cable’s extensions to Ashgabat, Anau, Yashlyk, Kaahka, Dushak and Tejen. Additionally, Huawei Technologies Co., Ltd. agreed to mount digital automatic telephone stations in Akhal and in Lebap regionvas well as a digital automatic telephone station in Turkmenabat. The purpose of Phase 2 was to acquire telecommunication equipment and spare parts for the Ministry of Communications of Turkmenistan. The equipment was to be used for the the construction of digital automatic telephone exchanges (строительство новых цифровых АТС), the construction of Farap-Turkmenabat-Atamurat-Magdanly, Tejen-Serahs and Ashgabat-Dashoguz fiber-optic communication lines (волоконно-оптических линий связи «Фарап–Туркменабат–Атамурат–Магданлы» и «Теджен–Серахс» и «Ашхабад–Дашогуз»), the expansion of the capacity of the Turkmenistan's national cellular communication network (TM CELL) [расширение емкости Национальной сети сотовой связи «TM CELL»], and the expansion of CDMA radio access network (сети радиодоступа стандарта CDMA). Phase 2 involved the installation of 84 basic stations in Asgabat and other regions, including the installations of stations along the Turkmenbasy-Asgabat-Mary-Turkmenabat road, in order to meet Turkmenistan's growing demand for mobile communication. The number of users of the CDMA radio access network was expected to rise by 10,000 upon completion of Phase 2. 10 basic stations were to be installed in Asgabat and its suburbs, Coganly, Bekrewe, Bagyr and Bedew, and and in the Arcabil settlement, the town of Abadan, and in Gokdepe District. The fiber optic communication lines were to link the large and small towns of Turkmenistan, and the Farap-Turkmenabat-Atamyrat-Magdanly fibre-optic line was to be 450 kilometers upon completion. Once all the stations reached their full capacity, the new fibre-optic line was expected to provide high-quality digital communications for 14 large localities in the south of the Lebap Region. Additionally, the Tejen-Sarahs fibre-optic telecommunication main line was expected to be 130 kilometers long when it was done. Phase 3 involved the acquisition of telecommunications equipment for Turkmenistan’s Ministry of Communications. According to a 2012 annual report published by the State Bank for Foreign Economic Affairs of Turkmenistan, Phase 3 entered implementation. However, its precise implementation start date is unknown.