China Eximbank provides USD $78 million loan for Conakry Electricity Network Rehabilitation and Extension Project (Linked to Project ID#53003)

On January 4, 2013, the Export-Import Bank of China signed a USD $334.65 million preferential buyer’s credit (PBC) agreement [CHINA EXIMBANK PBC NO. (2013) 49 TOTAL NO. (437)] with the Government of Guinea for the 240MW Kaléta Hydroelectric Power Plant Construction Project. The PBC, which is captured via Project ID#53003, carries the following terms: 20 year maturity, 9 year grace period, 2% interest rate, and 0.3% management fee. The Government of Guinea used the proceeds from the PBC to on-lend to a project company and special purpose vehicle (SPV) called Société De Gestion de Kaléta (SOGEKA or 凯乐塔电站管理公司). The borrower (SOGEKA) was to use the proceeds of the PBC to finance 75% of the cost of a $446 million commercial (EPC) contract between China International Water & Electric Corporation and the Government of Guinea, which was signed on August 15, 2011. As of June 30, 2020 and December 31, 2020, SOGEKA’s outstanding repayment obligations under the China Eximbank PBC agreement amounted to $404.14 million. SOGEKA also signed a power purchase agreement (PPA) with the state-owned power utility, Electricité de Guinée (EDG), and agreed that once the Kaléta dam was operational, it would use the proceeds from the sale of electricity (generated by the dam) in order to facilitate the repayment of the China Eximbank loan. When SOGEKA was first established, the Government of Guinea held a 51% equity stake and China International Water & Electric Corporation held a 49% equity stake. However, on November 2, 2016, China Three Gorges Corporation purchased the Government of Guinea’s 51% equity stake for $200 million. The Government of Guinea used the $200 million to meet the requirement in a separate China Eximbank preferential buyer’s credit agreement (captured via Project ID#187) that covers 15% of the total cost ($1.383 billion) of the 450MW Souapiti Hydroelectric Power Plant Construction Project. The Kaléta Hydroelectric Power Plant Construction Project involved the construction of a 240 MW dam that is located 110 km north of Conakry on the Konkouré River. The facility includes a roller-compacted concrete dam 72 feet in height by 5,069 feet in length. The dam impounds a reservoir that has 23 million cubic feet of storage capacity and the facility’s powerhouse has three 80-MW vertical axis Francis turbines. China International Water & Electric Corporation — a subsidiary of China Three Gorges Corporation — was the engineering, procurement, and construction (EPC) contractor responsible for implementation. Construction began on April 18, 2012. Kaléta dam began to fill water in April 2015. The turbines began to run and distribute electricity ahead of schedule on May 29, 2015. The power plant was constructed according to Chinese technical specifications, and 90% of its electromechanical equipment came from China. The dam was officially put into use on September 29, 2015. Then, an official project completion ceremony took place on October 10, 2015. As of January 31, 2019, the Kaléta hydroelectric power plant had generated 2.708 billion kilowatt-hours of electricity. It reportedly doubled Guinea's electricity supply. Electricity subsidies from the Government of Guinea increased to 0.8% of GDP during the first half of 2019 when the country’s state-owned electricity company, the Public Utility Company (EDG), started to pay for the electricity generated by the Kaléta Hydroelectric Power Plant in January 2019. On January 22, 2015, the Government of Guinea also authorized the ratification of a USD $78,064,538.90 loan agreement with China Eximbank for the Conakry Electricity Network Rehabilitation and Extension Project. The borrowing terms of this loan, which are captured via Project ID#91941, are unknown. However, it is known that the borrower was to use the proceeds of the loan to finance an amended and expanded version of the commercial (EPC) contract that China International Water & Electric Corporation and the Government of Guinea signed on August 15, 2011. The purpose of this project was to evacuate power from the Kaléta hydroelectric power plant by constructing and rehabilitating 42 km of transmission lines and several substations, including (1) a 110 kV double circuit transmission line between Matoto substation and Manéah (Maneah) substation; (2) a 225 kV transmission line between Kaléta substation and Manéah substation; and (3) Tombo substation. The project also involved the acquisition and installation of electronic metering devices. CWE was the general EPC contractor responsible for implementation. However, Guangxi Transmission & Substation Construction Company was also involved as a subcontractor. The commissioning of all substations and transmission lines was completed on July 29, 2015. The project’s one-year warranty period officially began on August 31, 2015. A project performance certificate was issued on September 9, 2016.

Additional details

1. This project is also known as the Urban Network Transformation Project. The French project title is LE PROJET DES TRAVAUX DE CONCEPTION, CONSTRUCTION, REHABILITATION ET MODERNISATION DU RESEAU ELECTRIQUE DE CONAKRY ET DE FOURNITURE DES COMPTEURS A PREPAIEMENT or La réhabilitation du réseau de transport d'électricité de la ville de Conakry. The Chinese project title is 几内亚城网改造项目 or 城网改造项目 or 几内亚科纳克里城网改造项目 or 科纳克里城网改造项目 or 凯乐塔输出工程及城网改造项目). 2. This loan is not included in the database of Chinese loan commitments that SAIS-CARI released in July 2020. Nor is it included in the the China’s Overseas Development Finance Dataset that Boston University's Global Development Policy Center published in December 2020. 3. AidData relies on the face value of the loan that is recorded in the World Bank’s Debt Reporting System (DRS). 4. For the time being, AidData assumes that the same borrowing terms (20 year maturity, 9 year grace period, and 0.3% management fee) that applied to the 240MW Kaléta Hydroelectric Power Plant Construction Project applied to the Conakry Electricity Network Rehabilitation and Extension Project (since the proceeds from these two loans supported the same commercial contract with CWE). 5. A June 2021 publication from Guinea’s Ministry of Finance (https://www.dropbox.com/s/cix64qa1ubdpcwn/BULLETIN-STATISTIQUE-QUATRIEME-TRIMESTRE-2020-vf-1-juin-2021.pdf?dl=0) identifies the Government of Guinea’s total outstanding debt to China Eximbank for the 240MW Kaléta Hydroelectric Power Plant Construction Project as $404.14 million. This figure likely refers to the joint value of the debt incurred by the Government of Guinea for the 240MW Kaléta Hydroelectric Power Plant Construction Project and the Conakry Electricity Network Rehabilitation and Extension Project (since the proceeds from these two loans supported the same commercial contract with CWE). $404.14 million is slight less than the sum of the $334.65 million China Eximbank loan that was issued in 2013 and the $78,064,538.90 loan that was issued in 2015 (which may be due to the netting out of reflows/repayments to the lender). 6. The loan's interest rate (2%) is recorded in the World Bank's Debtor Reporting System (DRS). See https://www.dropbox.com/s/ab8qt4n6jijcbhd/IDS_Average%20interest%20on%20new%20external%20debt%20commitments.xlsx?dl=0 and https://www.dropbox.com/s/2sw4f7gluxa52fk/DRS%20Official%20Commitments%20from%20China%20Through%202021.xlsx?dl=0

Number of official sources

17

Number of total sources

24