China Eximbank provides $402 million buyer’s credit loan for CEIBA-2 Submarine Cable System Project (Linked to Project ID#484 and ID#58439)

In 2006, China Eximbank and the Government of Equatorial Guinea signed a $2 billion oil-backed buyer’s credit facility agreement for various infrastructure projects (captured via Project ID#484). All subsidiary loans approved under this facility agreement carry the following terms: a 5.5% interest rate, a 5 year maturity, and a 2 year grace period. Then, in 2015, China Eximbank and the Government of Equatorial Guinea signed a $402,033,662 subsidiary buyer’s credit loan agreement for the CEIBA-2 Submarine Cable System Project. The proceeds of the loan were used by the borrower to finance a commercial contract between El Gestor de Infraestructuras de Telecomunicaciones de Guinea Ecuatorial (GITGE or ‘Manager of Telecommunications Infrastructure of Equatorial Guinea’) and Huawei Marine Networks Co. Ltd. (Huawei Marine), which was signed in March 2015. According to the Autonomous Fund for Amortization of Public Debt (Caja Autónoma de Amortización de la Deuda Pública) within Equatorial Guinea’s Ministry of Finance and Budget, the China Eximbank loan for this project had full disbursed as of December 31, 2019 and the borrower had made principal ($87,944,373.00) and interest (6,595,828.00) repayments worth $94,540,201 as of December 31, 2019. The purpose of the project was to construct the Ceiba-2 Submarine Cable System, which consists of a 400 km submarine cable (with a design capacity of 8 Tbps) connecting Malabo and Bata in Equatorial Guinea, with a branching unit to Kribi in Cameroon. The Ceiba-2 cable system, which is owned and operated by GITGE, is equipped with an initial 40 Gbps lambda system and is scalable to a 100 Gbps lambda system to meet future demand. The Ceiba-2 Submarine Cable System allows the ACE submarine cable to be interconnected with Cameroon, since the Ceiba-2 and ACE submarine stations in Bata are located next to each other and are interconnected with direct fiber optics. Additionally, GITGE owns capacity on the China Eximbank-financed SAIL submarine cable system between Kribi, Cameroon and Fortaleza, Brazil (captured via Project ID#58439). Ceiba-2+SAIL delivers a new route to the United States passing through Latin America and Africa. Huawei Marine was the general contractor responsible for implementation. Construction began in October 2015 and the concluded in March 2017. The submarine cable was officially inaugurated on June 4, 2018.

Additional details

1. The Chinese project title is 赤道几内亚Ceiba-2海缆项目 or Ceiba-2 海缆系统 or 海底光缆项目 or “木棉2号”海底光缆. The Spanish project title is El cable submarino de la fibra óptica Ceiba-2. 2. The face value of the loan is drawn from ‘Cuadro General de la deuda al 31/12/2019’ from the Caja Autónoma de Amortización de la Deuda Pública within Equatorial Guinea’s Ministry of Finance and Budget. 3. This China Eximbank loan is not included in the database of Chinese loan commitments that SAIS-CARI released in July 2020. Nor is it included it in the China’s Overseas Development Finance Dataset that Boston University's Global Development Policy Center published in December 2020. 4. Some sources suggest that project implementation commenced in October 2016 rather than October 2015. This issue warrants further investigation. 5. On September 27, 2015, a Memorandum of Understanding (MOU) was signed between CAMTEL — Cameroon’s state-owned telecommunications operator — and Equatorial Guinea's GITGE on managing the SAIL submarine cable upon its completion. Then, on September 29, 2017, GITGE officially joined the SAIL consortium (also known as the Cameroon-Brazil Submarine Cable Consortium and the CBSC Consortium) with CAMTEL and China Unicom. On Mary 22, 2018, GITGE and CAMTEL signed an CFA 18 billion commercial contract, which allowed GITGE to purchase capacity on the SAIL submarine cable system between Kribi, Cameroon and Fortaleza, Brazil (through an extension of SAIL that runs from Malabo and Bata in Equatorial Guinea to Kribi in Cameroon). The Cameroon-Equatorial Guinea extension was expected to be put into use during the first quarter of 2019.

Number of official sources

11

Number of total sources

18