China Eximbank provides 16-month principal payment deferral for $312.4 million buyer’s credit loan supporting 275MW Minas-San Francisco Hydroelectric Power Plant Construction Project in September 2020 (Linked to Project ID#35982, #91361, #93431, #93432, #96295)

On September 16, 2020, China Eximbank and the Government of Ecuador signed a debt rescheduling agreement, which provided 16-month principal payment deferrals (i.e. additional grace periods) for 4 buyer’s credit loans: a $1.68 billion buyer’s credit loan for the 1500MW Coca Codo Sinclair Hydroelectric Facility Project (captured via Project ID#38935), a $484.6 million buyer’s credit loan for the 500KV & 230KV Transformation Lines and Substations Project (captured via Project ID#58432), a $554.2 million buyer's credit loan for the 487.8 MW Sopladora Hydroelectric Power Plant Construction Project (captured via Project ID#35818), and a $312.4 million buyer’s credit loan the 275MW Minas-San Francisco Hydroelectric Power Plant Construction Project (captured via Project ID#35982). Under the terms of the September 16, 2020 agreement, principal payments on all four loans were scheduled to resume in March 2022, and the deferred principal payments were to be distributed proportionally between March 2022 and the final maturity dates of the four loans (between 2025 and 2029). With respect to the buyer’s credit loan for the 1500MW Coca Codo Sinclair Hydroelectric Facility Project, the borrower was exempted from its responsibility for making principal payments on September 21, 2020, March 21, 2021, and September 21, 2021. Its next principal payment was scheduled for March 21, 2022. The principal payment deferral that China Eximbank granted to the Government of Ecuador for the loan supporting the 1500MW Coca Codo Sinclair Hydroelectric Facility Project is captured via Project ID#93431. With respect to the buyer’s credit loan for the 500KV & 230KV Transformation Lines and Substations Project, the borrower was exempted from its responsibility for making principal payments on September 21, 2020, March 21, 2021, and September 21, 2021. Its next principal payment was scheduled for March 21, 2022. The principal payment deferral that China Eximbank granted to the Government of Ecuador in 2020 for the loan supporting the 500KV & 230KV Transformation Lines and Substations Project is captured via Project ID#91361. With respect to the buyer’s credit loan for the 487.8 MW Sopladora Hydroelectric Power Plant Construction Proje , the borrower was exempted from its responsibility for making principal payments on September 21, 2020, March 21, 2021, and September 21, 2021. Its next principal payment was scheduled for March 21, 2022. The principal payment deferral that China Eximbank granted to the Government of Ecuador for the loan supporting the 487.8 MW Sopladora Hydroelectric Power Plant Construction Project is captured via Project ID#93432. With respect to the buyer’s credit loan for the 275MW Minas-San Francisco Hydroelectric Power Plant Construction Project, the borrower was exempted from its responsibility for making principal payments on September 21, 2020, March 21, 2021, and September 21, 2021. Its next principal payment was scheduled for March 21, 2022. The principal payment deferral that China Eximbank granted to the Government of Ecuador for the loan supporting the 275MW Minas-San Francisco Hydroelectric Power Plant Construction Project is captured via Project ID#93434. The September 16, 2020 debt rescheduling produced cash flow savings worth $474 million ($158 million in 2020 and $316 million in 2021). Then, on September 13, 2022, China Eximbank and the Government of Ecuador agreed to reschedule $1.832 billion of outstanding debt under four loan agreements that they had previously signed for the 500KV & 230KV Transformation Lines and Substations Project, the 1500MW Coca Codo Sinclair Hydroelectric Facility Project, the 487.8 MW Sopladora Hydroelectric Power Plant Construction Project, and the 275MW Minas-San Francisco Hydroelectric Power Plant Construction Project. Under the terms of the September 19, 2022 rescheduling agreement, the parties agreed to (i) 3-4 year maturity extensions, (ii) 6-month grace period extensions for all commercial loans, and (iii) interest rate reductions for 3 of the 4 loans. With respect to the $484.6 million buyer’s credit loan for the 500KV & 230KV Transformation Lines and Substations Project, the borrower was exempted from its responsibility for making a principal payment on September 21, 2022 (effectively granting a 6-month grace period). The loan’s interest rate was also reduced by 0.2% (from 6-month LIBOR plus a 4.2% margin to 6-month LIBOR plus a 4.0% margin) and its final maturity date was extended by approximately 3.25 years (to January 27, 2033). Under the terms of the rescheduling agreement, the borrower was responsible for making 20 semi-annual principal repayments worth $18,839,739.88 between March 21, 2023 and September 21, 2032. With respect to the $1.68 billion buyer’s credit loan for the 1500MW Coca Codo Sinclair Hydroelectric Facility Project, the borrower was exempted from its responsibility for making a principal payment on September 21, 2022 (effectively granting a 6-month grace period). The loan’s interest rate was also reduced by 0.55% (from 6.9% to 6.35%) and its final maturity date was extended by approximately 3.75 years (to February 14, 2029). Under the terms of the rescheduling agreement, the borrower was responsible for making 12 semi-annual principal repayments worth $74,983,428.82 between March 21, 2023 and September 21, 2028. With respect to the $554.2 buyer’s credit loan for the 487.8 MW Sopladora Hydroelectric Power Plant Construction Project, the borrower was exempted from its responsibility for making a principal payment on September 21, 2022 (effectively granting a 6-month grace period). The loan’s interest rate was left unchanged, but its final maturity date was extended by approximately 3.25 years (to January 9, 2030). Under the terms of the rescheduling agreement, the borrower was responsible for making 14 semi-annual principal repayments worth $23,159,797.39 between March 21, 2023 and September 21, 2029. With respect to the $312.4 million buyer’s credit loan the 275MW Minas-San Francisco Hydroelectric Power Plant Construction Project, the borrower was exempted from its responsibility for making a principal payment on September 21, 2022 (effectively granting a 6-month grace period). The loan’s interest rate was also reduced by 0.2% (from 6-month LIBOR plus a 4.2% margin to 6-month LIBOR plus a 4.0% margin) and its final maturity date was extended by 3 years (to April 10, 2031). Under the terms of the rescheduling agreement, the borrower was responsible for making 17 semi-annual principal repayments worth $13,573,833.86 between March 21, 2023 and March 21, 2031. The September 19, 2022 rescheduling of the loan supporting the 1500MW Coca Codo Sinclair Hydroelectric Facility Project is captured via Project ID#96292. The September 19, 2022 rescheduling of the loan supporting the 500KV & 230KV Transformation Lines and Substations Project is captured via Project ID#96293. The September 19, 2022 rescheduling of the loan supporting the 487.8 MW Sopladora Hydroelectric Power Plant Construction Project is captured via Project ID#96294. The September 19, 2022 rescheduling of the loan supporting the 275MW Minas-San Francisco Hydroelectric Power Plant Construction Project is captured via Project ID#96295. The Government of Ecuador and China Development Bank (CDB) also rescheduled multiple loans on September 19, 2022, and the rescheduling agreements with CDB and China Eximbank jointly produced cash flow savings worth $1.4 billion. The September 2022 deal reduced repayments to CDB by $745 million over a 3-year period (2022-2024) and reduced repayments to China Eximbank by $680 million over a 4-year period (2022-2025). Another feature of the deal is that it postponed the shipment and sale oil to CNPC, thereby giving Petroecuador the flexibility to sell more of its oil to other buyers at market prices.

Additional details

1. The other loans that had payments deferred via this September 16, 2020 agreement included those funding the 500KV & 230KV Transformation Lines and Substations Project (deferral captured via #91361), the 1500MW Coca Codo Sinclair Hydroelectric Facility Project (deferral captured via #93431), and the 487.8 MW Sopladora Hydroelectric Power Plant Construction Project (deferral captured via #93432). 2. Per Ecuador's Ministry of Finance, the four loans that received payment deferrals are the four largest loans in Ecuador's credit portfolio with Eximbank, representing 84.2% of the total debt. 3. The September 2022 loan rescheduling agreement can be accessed in its entirety via https://www.dropbox.com/s/7y7w2q91up5ukcn/13%20September%202022%20Amendment%20Agreement%20related%20to%20BCL%20for%20Minas%20San%20Francisco%20Project.pdf?dl=0. The revised loan amortization table (repayment schedule) can be accessed on pg. 6.

Number of official sources

4

Number of total sources

9