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Overview

[Draw down amount] RMB 749.3 million drawn down from RMB 1.4 billion credit line provided by CDB to Telecom Argentina (Linked to Record ID#93222)

Commitments (Constant USD, 2023)$112,040,312
Commitment Year•2020Country of Activity•ArgentinaDirect Recipient Country of Incorporation•ArgentinaSector•CommunicationsFlow Type•Loan

Status

Project lifecycle

Implementation

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Dec 24, 2020
First repayment (originally scheduled)
May 25, 2023
Last repayment (originally scheduled)
Dec 23, 2027

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Ultimate beneficial owners

At least 25% host country ownership

Funding agencies

State-owned Policy Banks

  • China Development Bank (CDB)

Receiving agencies

Private Sector

  • Telecom Argentina S.A.

Insurance providers

State-owned companies

  • China Export & Credit Insurance Corporation (Sinosure)

Loan description

[Draw down amount] RMB 749.3 million drawn down from RMB 1.4 billion credit line provided by CDB to Telecom Argentina

Grace period•2.417 yearsGrant element•10.7826%Interest rate (t₀)•6.8%Interest type•Fixed Interest RateMaturity•7 years

Narrative

Full Description

Project narrative

On December 14, 2020, the Shenzhen Branch of China Development Bank (CDB) signed an agreement with Telecom Argentina, S.A., which initially provided a line of credit of up to RMB 700 million. The credit line was eligible to increase to RMB 1.4 billion if insurance could be secured from China Export & Credit Insurance Corporation (Sinosure). This increase appears to have occurred, but on an unknown date. In order to access the pledged funds, Telecom Argentina was required to sign subsequent loan agreements. As of July 2022, loan agreements worth RMB 749.3 million had been signed (as captured via Record ID#93232. They included: (1) a loan agreement for the first tranche, worth RMB 19.6 million, that was signed on December 24, 2020; (2) loan agreements for the second, third, fourth, fifth, sixth, seventh, eighth, and ninth tranches, worth RMB 449 million, that were signed in 2021; (3) an unknown number of loan agreements worth RMB 244 million that were signed during the first half of 2022 (including the tenth tranche worth RMB 25.9 million, which was signed on January 21, 2022); and (4) a loan agreement for another tranche worth RMB 36.7 million, that was signed on July 27, 2022. The loans all carried the following borrowing terms: a 6.8% annual interest rate and a repayment period from May 2023 to December 2027 (indicating a seven year maturity and a grace period of two years and five months). Telecom Argentina reported that the loan proceeds were to be used to finance an investment plan related to the acquisition of telecommunications equipment. However, the specific projects to be financed are unknown.

Staff comments

1. For the time being, AidData assumes that Sinosure credit insurance was secured, given that the total value of the signed loan agreements exceeded RMB 700 million. However, this issue warrants further investigation. 2. Telecom Argentina S.A. is the major local telephone company for the northern part of Argentina, including the whole of the city of Buenos Aires. Briefly known as Sociedad Licenciataria Norte S.A., it quickly changed its name, and is usually known as simply "Telecom" within Argentina. As of 2019, current approximate ownership of Telecom Argentina was 31.53% Fintech Telecom LLC 18.75% Cablevisión Holding S.A. (CVH) 20.06% VLG S.A.U. 29.65% publicly traded 0.01% Class C shares.