China Eximbank reschedules 18 government concessional loans and preferential buyer's credits worth CFA 148 billion previously contracted by Government of Cameroon (Linked to Record ID#59059)

Project narrative

In June 2018, China Eximbank suspended disbursements under all of its loan agreements with the Government of Cameroon due to the fact that the borrower had fallen into arrears. Then, on January 16, 2019, Cameroon's Minister of Economy, Planning and Regional Development (Minepat) wrote a letter to the Chinese Ambassador to Cameroon and indicated that his government was prepared to repay 30% of the principal due under its loan agreements with China Eximbank between 2019 and 2021. Then, in July 2019, China Eximbank and the Government of Cameroon signed a debt rescheduling agreement. Under the terms of the agreement, China Eximbank agreed to reschedule 18 government concessional loans (GCLs) and preferential buyer's credits (PBCs) previously contracted by the Government of Cameroon — with scheduled principal repayments between July 2019 and March 2022 — by allowing the borrower to defer scheduled principal repayments between July 21, 2019 and March 21, 2022 to later dates but without any maturity extensions. The total amount of restructured debt was equivalent CFA 148 billion ($253 million) — or 70% of the loan principal that was scheduled for repayment between July 2019 and March 2022. Under the terms of the agreement, the Government of Cameroon agreed to repay 30% of the loan principal according to the original July 2019-March 2022 schedule (i.e. without any payment deferrals). The Government of Cameroon also reportedly agreed to repay all overdue principal and interest payments (worth approximately CFA 52 billion) -- under the 18 GCL and PBC agreements -- by April 2, 2019. The July 2019 debt rescheduling likely applied to the following China Eximbank GCLs and PBCs that the Government of Cameroon previously contracted: (1) a $97.13 million PBC for Phase 2 of the Douala (Yato) Water Supply Project (captured via Record ID#31229); (2) a $52.05 million PBC for Phase 1 of the Cameroon Fiber Optic Transmission Backbone Project (captured via Record ID#201); (3) a $14 million PBC for MATGENIE Company Rehabilitation Project (captured via Record ID#22595); (4) a $423 million PBC for Phase 1 of the Kribi Deep Sea Port Project (captured via Record ID#350); (5) a $482.8 million PBC for Phase 1 of the Yaoundé-Douala Highway Project (captured via Record ID#30926); (6) a $168.3 million PBC for Phase 1 of National Broadband Network Project (captured via Record ID#31253); (7) a $155.5 million PBC for Construction of National Emergency Telecommunications System Project (captured via Record ID#35170); (8) a $385.8 million PBC for Kribi-Lolabe Highway Construction Project (captured via Record ID#46436); (9) a $337.1 million PBC for National Broadband Network Phase II Project (captured via Record ID#58397); (10) an RMB 350 million GCL for Cameroon Telecommunications CDMA Project (captured via Record ID#11939); (11) an RMB 170.5 million GCL for Phase 1 of Douala (Yato) Water Supply Project (captured via Record ID#315); (12) an RMB 280 million GCL for Bafoussam and Limbe Stadiums Project (captured via Record ID#31888); (13) an RMB 337 million GCL for 15MW Mekin Hydropower Project (captured via Record ID#974); (14) an RMB 450 million GCL for 1500 Social Housing Units Project (captured via Record ID#349); (15) an RMB 433 million GCL for E-Post Project (captured via Record ID#31243); (16) an RMB 430 million GCL for MA60 Aircraft Acquisition Project (captured via Record ID#35169); (17) an RMB 1.059 billion GCL for 9 Cities Water Supply Project (captured via Record ID#30903); (18) an RMB 513 million GCL for the Cameroon Backbone Expansion Project (captured via Record ID#36246); The IMF later reported that the Government of Cameroon honored its commitment to clear all arrears by April 2019. Additionally, the lender and the borrower agreed to cancel the committed but undisbursed loan balances worth approximately CFA 10 billion (for certain loans with disbursement deadlines that had already passed). Then, according to the IMF, the Government of Cameroon missed several debt service payments to China Eximbank in early 2023. It noted that '[w]hile these breaches were minor (0.2 percent of GDP) and temporary, they highlight the need to improve cash management and limit spending through exceptional procedures.'