China Eximbank provides $249.5 million preferential buyer’s credit for Ulaanbaatar Central Wastewater Treatment Plant Construction Project (Linked to Record ID#69003)

Project narrative

On March 1, 2018, China Eximbank and the Government of Mongolia’s Ministry of Finance signed an RMB 1 billion government concessional loan (GCL) agreement for the Ulaanbaatar Central Wastewater Treatment Plant Construction Project. The GCL, captured via Record ID#69003, carries the following borrowing terms: a 20 year maturity, a 7 year grace period, and a 2% interest rate. Then, on January 20, 2020, China Eximbank and the Government of Mongolia’s Ministry of Finance signed a $249,574,613 preferential buyer’s credit (PBC) agreement [CHINA EXIMBANK PBC 2020 (1) TOTAL NO. (497)] for the Ulaanbaatar Central Wastewater Treatment Plant Construction Project. The PBC, captured via Record ID#91228, carries a 2% interest rate, a 0% default (penalty) interest rate, a 7-year grace period, a 20-year maturity, a 0.25% commitment fee, and a 0% management fee. It came into force on April 20, 2020. The proceeds of the GCL are to be used by the borrower to finance a commercial contract with China Tiesiju Civil Engineering Group (CTCE) and Beijing Construction Engineering Group (BCEG). The proceeds of the PBC are to be used by the borrower to finance 95% of the cost of a $262,710,119.53 commercial (EPC) contract (No. 26) with China Tiesiju Civil Engineering Group (CTCE) and Beijing Construction Engineering Group (BCEG), which was signed on February 1, 2019 and amended on March 29, 2019 (No. 53), May 15, 2019 (No. 2019/81), July 3, 2019 (No. 2019/129), and April 29, 2020 (No. 2020/101). The purpose of the project is to construct a wastewater treatment plant — with a daily capacity of 250,000 cubic meters of wastewater — on a 40-hectare site in Ulaanbaatar’s 20th subdistrict of Songinokharkhan district. CTCE and BCEG were the EPC contractors responsible for project implementation. A formal project commencement ceremony was held during Chinese Foreign Minister Wang Yi’s visit to Mongolia on August 27, 2018. Then, on February 28, 2019, a groundbreaking ceremony took place. Works were originally scheduled to last 36 months (expected completion date: February 28, 2022). However, project implementation stalled in mid-2020 due to the COVID-19 pandemic. Then, in July 2020, 24 technicians arrived to guide CTCE employees stationed there to resume construction. Construction restarted in August 2020. One month later, in September 2020, local engineering and technical staff were preparing the site for the construction of the first of the two biological treatment blocks. By August 2021, the project had achieved a 28 percent completion rate. Successful concrete pouring into the inner walls of three reaction tanks took place on March 31, 2022. The wastewater plant is currently scheduled to be handed over and put into operation on February 28, 2025. To date, the project has reportedly employed 50 foreign workers and 450 Mongolian workers. An Environmental Impact Assessment (EIA) for the project was conducted by Queen Nature LLC ("Хатан байгаль" ХХК) and approved on December 30, 2019.