Silk Road Fund provides RMB 1.4 billion loan for Samarkand Tourism Complex Construction Project

On June 13, 2018, the Silk Road Fund and the National Bank for Foreign Economic Activity of the Republic of Uzbekistan signed an MOU regarding the construction of a cultural tourism complex in Samarkand. Then, in April 2020, the Silk Road Fund and the National Bank for Foreign Economic Activity of the Republic of Uzbekistan signed an RMB 1.2 billion ($205 million) loan agreement for the Samarkand Tourism Complex Construction Project. The face value of the loan was subsequently upsized to RMB 1.4 billion in August 2020. The loan carries a 10-year maturity and a 3-year grace period. Its interest rate is unknown. However, it is known that the National Bank for Foreign Economic Activity of the Republic of Uzbekistan on-lent the proceeds of the loan to a special purpose vehicle called Samarkand Touristic Centre Limited Liability Company (that was legally incorporated in Samarkand on November 20, 2019 and is apparently a wholly-owned subsidiary of the National Bank for Foreign Economic Activity of the Republic of Uzbekistan). The loan achieved a 100% disbursement rate. It disbursed RMB 420 million in 2020 and RMB 980 million in 2021. As of December 21, 2021, the National Bank for Foreign Economic Activity of the Republic of Uzbekistan disclosed in its audited financial statements that it was in breach of the non-performing loan ratio covenant of the RMB 1.2 billion loan agreement with the Silk Road Fund. However, on December 29, 2021, the National Bank for Foreign Economic Activity received a waiver of claims from Silk Road Fund in connection with this contractual breach. The project involves the design, construction, development, commissioning, and operation of the Samarkand Tourism Complex, which aims to revitalize the cultural life and tourism in Samarkand (Uzbekistan's second largest city). The complex is being built on a 360 hectare plot of land. It includes a large international conference center (‘congress center’), eight hotels (including five, four, and three-star hotels), an open-air theater, waterways, pools, artificial islands, restaurants, cafes, bars, parks, recreation areas, and other cultural, gastro, medical, business and tourism facilities. Upon completion, it is expected that the complex will be used in connection with the 2022 Shanghai Cooperation Organization Summit. The project site is located in the eastern part of the city of Samarkand. It centers around the affluent waterway of the Samarkand rowing canal, which, in Soviet times, served as a training base for the USSR national team and a venue for All Union competitions. Four of the complex’s hotels sit on the northern bank of the rowing canal, and the other four hotels sit on the southern bank of the rowing canal. Arup Mühendislik ve Müşavirlik Limited Şirketi (a Turkish firm) and China Construction Engineering Design Group Corporation Ltd. (a subsidiary of CSCEC) are the contractors responsible for project design, and Enter Engineering Pte. Ltd. (a Singaporean firm) is the contractor responsible for project implementation. The National Bank for Foreign Economic Activity of the Republic of Uzbekistan and China Construction Engineering Design Group Corporation Ltd. signed a project design contract in August 2018. Then, in January 2019, China Construction Engineering Design Group Corporation Ltd. completed a draft master plan for the Samarkand Tourism Center. Project implementation was underway in 2020 and 2021. On April 15, 2021, Uzbekistan’s President Shavkat Mirziyoyev conducted an on-site project inspection. The Samarkand Tourism Complex is scheduled to open to the pubic in 2022.

Additional details

1. This project is also known as the Samarkand Tourism Center Project, the Samarkand City Project, the Samarkand City Tourist Zone Project, the Samarkand Tourism Center Construction and Development Project, and the Silk Road Samarkand Complex Project. The Chinese project title is 撒马尔罕综合开发项目 or 撒马尔罕旅游中心项目. The Russian project title is Туристический центр Silk Road or проекту строительства туристической зоны «Samarkand city». 2. Kosta Legal served as counsel to the lender. 3. The tallest and highest-end hotel in the Samarkand Tourism Complex will be a 22-story structure with 234 rooms (including executive suites and two presidential suites) operated by a Chinese hotel chain. It will be called the Samarkand Regency Hotel. 4. Mumin Kadyrov is a project manager for the Samarkand Tourism Center Construction and Development Project. 5. Samarkand Touristic Centre Limited Liability Company is a joint venture of Bakhtiyor Fazilov (60% equity stake) and LLC “NBU Samarkand Invest” (40% equity stake). Bakhtiyor Fazilov is a prominent Uzbek businessman and the Chairman of Eriell Group and Enter Engineering. LLC “NBU Samarkand Invest” is a subsidiary of the National Bank for Foreign Economic Activity of the Republic of Uzbekistan

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11

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41