CDB reschedules $500 million loan to DBK via interest rate reduction (Linked to Project ID#96061)

On August 1, 2009, the Export-Import Bank of China (China Eximbank) entered into a master facility agreement (MFA) with the Development Bank of Kazakhstan JSC (DBK). China Eximbank permitted DBK to draw down up to $5 billion from the MFA, which included an unrestricted $1.5 billion loan tranche (captured via Project ID#53547) and a restricted $3.5 billion loan tranche (captured via Project ID#54797). The MFA covered a period of up to 15 years and it prohibited DBK from incurring indebtedness exceeding 25% of its assets or disposing of over 25% of its assets, in addition to a change of control clause favoring China Eximbank. The restricted portion of the MFA was for projects with a ‘Chinese component’ (i.e. involving the purchase of Chinese goods and services), whereas the unrestricted portion was for DBK’s general purposes. Under the restricted portion of the MFA, on September 29, 2009, DBK entered into an individual buyer’s credit loan (BCL) agreement (ID#BLA0927) with China Eximbank worth $3.5 billion. This BCL carried the following borrowing terms: a maturity period of 10 years (final maturity date: July 21, 2019) and a floating interest rate. As of late July 2009, the interest rate that applied to this BCL was 4-4.5% per annum. The restricted ($3.5 billion) portion of the China Eximbank MFA was aimed at the development of energy, transport and communication infrastructure and the funding of strategic projects in the metallurgy, chemical, and oil industries. 50% of the funds were to be used to purchase Chinese goods and services. The proceeds from the $3.5 billion BCL were also be used for investment projects of Kazakhstan companies, including the exporting of industrial output, services and equipment to China. National Welfare Fund Samruk-Kazyna provided a repayment guarantee for funds borrowed by DBK under the restricted portion of the facility. The maturity length of the restricted portion of the facility was 15 years and it had a floating interest rate. As of late July 2009, the interest rate was 4-4.5% per annum. Under the unrestricted portion of the MFA, on October 24, 2009, DBK entered into an individual buyer’s credit loan (BCL) agreement (ID#BLA0918) with China Eximbank for the amount of $1.5 billion. This BCL carried the following borrowing terms: a maturity period of 10 years (final maturity date: July 21, 2019), a grace period of 2 years, and an interest rate of 6-month LIBOR (0.843% in August 2009) plus a 5.5% margin. National Welfare Fund Samruk-Kazyna provided a repayment guarantee for funds borrowed by DBK under the unrestricted portion of the facility. On January 20, 2011, DBK prepaid a portion of the amount outstanding (worth $500 million) under the $1.5 billion loan agreement. In addition, on June 9, 2011, DBK and CDB entered into the supplemental loan agreement worth $500 million (captured via Project ID#96061). Under the agreement, DBK was permitted to draw down again, as a second tranche, the $500 million prepaid portion of the unrestricted portion of the MFA. This amendment also modified the terms of the loan agreement and, as a result, after July 21, 2011, interest applied at a fixed rate of 5.8% per annum (rather than a floating rate) and is payable semi-annually. Pursuant to an amendment agreement dated July 19, 2013, the interest rate was further reduced to 4% per annum. The July 19, 2013 loan rescheduling is captured via Project ID#96062). Principal repayments began in January 2017 and were scheduled for repayment over three years in semi-annual installments. As of June 30, 2017, following the voluntary prepayment of $200 million in January 2017, the principal amount outstanding under the unrestricted portion of the MFA was $800 million. The $1.5 billion loan was fully repaid in July 2018. The $500 million supplementary loan was fully repaid in 2019. The Kazakhstan stock exchange reported in 2010 the entire restricted portion of the MFA would direct funds to the modernization of Kazakhstan's three refineries (totaling approximately $3 billion), the construction of an integrated gas chemical complex in Atyrau (over $1 billion), and the construction of a steel plant in Aktobe (approximately $360 million). Under the restricted portion of China Eximbank MFA, on December 12, 2009, DBK entered into an individual $884 million loan agreement with the China Eximbank to finance the construction of an aromatic hydrocarbons complex at at the Atyrau Refinery. This loan is captured via Project ID#54066. As of June 30, 2017, the borrower had drown $874 million from this loan. The loan agreement was amended on December 19, 2013, May 8, 2014 and October 30, 2014. The loan was prepaid in full in July 2019. Several additional loans appear to have been issued under the restricted portion of China Eximbank MFA. On February 22, 2011, DBK entered into another individual loan agreement worth $1.4 billion with China Eximbank for the purpose of financing the construction of an integrated petrochemical project. No amounts have been drawn down under this individual credit agreement. As of 2021, no amounts had been drawn down under this individual loan agreement due the termination of the engineering, procurement and construction contract in respect of the integrated petrochemical project. Then, on June 6, 2012, Atyrau Refinery LLP — a project company — entered into a $1,130,408,642 buyer’s credit loan (BCL) agreement (#BLA201201) with China Eximbank for the Construction of Advanced Oil Refining Center at the Atyrau Refinery (captured via Project ID#39556). Then, on October 15, 2012, DBK entered into a $199.5 million preferential buyer’s credit (PBC) agreement with China Eximbank for the Construction of Advanced Oil Refining Center at the Atyrau Refinery. This project is captured via Project ID#54798. As of June 30, 2017, the principal amount outstanding under the restricted portion of the facility was $602 million.

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