China Eximbank provides $33.5 million buyer’s credit loan for Lot 3A Bahir Dar-Debre Markos 400kV Power Transmission Turnkey Project (Linked to Project ID#45047)

In November 2006, China Eximbank and the Government of Ethiopia’s Ministry of Finance and Economic Development signed a $500 million buyer’s credit facility agreement (互惠贷款) — also known as a master loan framework agreement and a master facility agreement — for an unspecified set of development projects. All subsidiary loans approved under the buyer’s credit facility agreement (captured via Project ID#45047) carried the following borrowing terms: a 13-year maturity and an interest rate of LIBOR plus a 2-3% margin. All of the subsidiary loans were secured with (i.e., collateralized against) Ethiopia's export receipts to China, which at the time primarily consisted of sesame seed export receipts. The buyer’s credit facility agreement also required that all Ethiopian exports (export receipts) to China to be overseen by the Commercial Bank of Ethiopia, the country’s largest state-owned financial institution. 16 subsidiary loans for 16 different projects were reportedly approved under the buyer’s credit facility agreement. According to the Government of Ethiopia’s Aid Management Platform (AMP), China Eximbank and the Government of Ethiopia signed a subsidiary buyer’s credit loan worth approximately ETB 335,934,342 ($33,593,434.20) for the Lot 3A Bahir Dar-Debre Markos 400kV Power Transmission Turnkey Project on October 17, 2008. The borrower was expected to use the proceeds of the loan to finance approximately 85% of the cost of a ETB 388,807,492.76 commercial contract between the Ethiopian Electric Power Corporation (EEPCo) — an Ethiopian state-owned enterprise — and Shanghai Electric Power Transmission and Distribution Engineering Co., Ltd., which was signed in August 2007. According to the Government of Ethiopia’s AMP, the ETB 335,934,342 ($33,593,434.20) loan achieved a 18% disbursement rate, with China Eximbank making a single loan disbursement (worth ETB 61,933,109) on March 31, 2010. The purpose of the project was to construct a 400 kV, 193.77 km power transmission line that connects Bahir Dar II substation to Debre Markos substation. Its precise implementation start date is unknown. However, as of September 2010, the project had achieved a 75% completion rate. The project was officially completed and inaugurated on March 19, 2011. It was originally scheduled to commence on October 17, 2007 and reach completion on April 17, 2010.

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