China Eximbank provides $10.9 million buyer’s credit loan for BM-1 230kV Bedele-Metu Power Transmission 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 99,364,756 ($10,930,123.16) for the BM-1 230kV Bedele-Metu Power Transmission Project on June 13, 2008. The borrower was expected to use the proceeds of the loan to finance approximately 85% of the cost of an ETB 115,000,771.67 commercial contract between the Ethiopian Electric Power Corporation (EEPCo) — an Ethiopian state-owned enterprise — and China CAMC Engineering Co. Ltd. (CAMCE), which was signed in August 2007. According to the Government of Ethiopia’s AMP, the ETB 99,364,756 loan achieved a 29% disbursement rate, with China Eximbank making 2 loan disbursements (worth ETB 29,231440) between 2010 and 2011: an ETB 20,063,073 disbursement on April 8, 2010, and an ETB 9,168,367 disbursement on July 7, 2011. This project involved the acquisition and installation of equipment — including transformers, outgoing line bays, and transformers bays — for the Bedele substation to Metu substation. CAMCE was the general EPC contractor responsible for project implementation. According to the Government of Ethiopia’s Aid Management Platform (AMP), the project reached completion. However, its precise implementation start and end dates are unknown. Its originally scheduled project completion date was October 1, 2009.

Additional details

1. AidData has estimated the all-in interest rate by adding 2.5% (the midpoint between a 2% and 3% margin) to the average 6-month LIBOR rate in June 2008 (3.104%). 2. This buyer's credit loan from China Eximbank is not included in the database of Chinese loan commitments that SAIS-CARI released in 2020 and re-released in 2021. 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. 3. The AMP system identification number for the M-1 230kV Bedele-Metu Power Transmission Project is 8714327100843. 4. 1 Ethiopian Birr (ETB) was equal to 0.11 United States Dollars (USD) in June 2008, which implies that the ETB 99,364,756 loan commitment recorded in the AMP was worth USD 10,930,123.16 at that time that it was contracted. 5. The Chinese project title is BM-1输电线路项目. 6. For the time being, AidData uses the date of the first loan disbursement as a proxy for the project implementation start date.

Number of official sources

6

Number of total sources

9