CDB provides $40 million loan to Uzbektelecom for 5G Telecommunications Infrastructure Project

On or around July 26, 2019, China Development Bank signed a $40 million loan agreement with Uzbektelecom — a state-owned telecommunication nation company in Uzbekistan — for a 5G Telecommunications Infrastructure Project. The loan carries the following borrowing terms: a maturity of 5 years, a grace period of 1.5 years, and an interest rate of LIBOR plus a 4.2% margin. The purpose of the project is to develop 5G data transmission technology, fiber-optic broadband access and modern mobile communication networks.

Additional details

1. One source puts the face value of the at $150 million. However, for the time being, AidData uses the more conservative estimate. 2. The Russian project title is модернизации и развитию телекоммуникационной инфраструктуры АК «Узбектелеком». 3. AidData has estimated the all-in interest rate by adding 4.2% to average 6-month LIBOR in July 2019 (2.206%). 4. On July 26, 2019, the Government of Uzbekistan announced plans to allow its Ministry of Information Technologies and Communications to conclude contracts with Huawei for the supply of technological equipment and software relevant to 5G development. This came after Huawei and the Ministry held discussions on July 11, 2019 regarding the possibility of launching a 5G network through one of Uzbekistan’s state-owned telecommunications operators. This decision coincided with the CDB announcement that it would allocate $40 million for telecommunications infrastructure projects with Uzbektelecom. Previously, in June 2019, the Uzbek Ministry for Development of Information Technologies and Communications signed an MoU with CITIC on the implementation of a smart city project that would involve a technological contribution from Huawei. 5. There are some indications that the $40 million CDB loan may have initially been issued to the National Bank of Foreign Economic Activity of the Republic of Uzbekistan (NBU) and then on-lent to Uzbektelecom. This issue warrants further investigation.

Number of official sources

3

Number of total sources

8