Narrative
Full Description
Project narrative
In 2012, the Tianjin Branch of China Development Bank provided an EUR 28 million loan to China Hyway Group Limited (中国昊远集团) for the 115 km Mekenajo-Dembidolo Road Upgrading Project. The borrowing terms of the loan are unknown. However, it is known that the borrower purchased a credit insurance policy from Sinosure. It is also known that the borrower was expected to use the proceeds of the loan to partially finance a commercial contract with the Ethiopian Roads Authority (ERA), which was signed on June 3, 2011. The purpose of the project was to upgrade a 117 km road that runs from Mekenajo to Dembidolo. The road project consisted of two segments: the upgrading of the 52.06 km Mekenajo to Ayra road segment, which starts in Mekenajo Town and ends in Ayra, branching off from Addis Ababa-Nekemte-Gimbi-Assosa main road at 456 km from the capital, Addis Ababa; and the upgrading of 65.5 km Chanka-Dembidolo road segment, which starts at Chanka Town and traverses in the westerly direction until it reaches Dembidolo. Project implementation commenced on October 7, 2011. The upgrading of the Mekenajo-Ayra (53 km) road segment segment was originally expected to reach completion on April 4, 2014 and the upgrading of the Chanka-Dembidolo (63 km) road segment was originally expected to reach completion on April 3, 2014. However, the project faced cost overruns and implementation delays. The road was ultimately completed and opened to traffic on July 28, 2016.
Staff comments
1. The Chinese project title is 埃塞Mekenajo-Dembidolo公路项目. 2. The two road segment were supported by two separate commercial contracts (or one contract with two components) signed by China Hyway Group Limited and ERA on June 3, 2011: an ETB 633.53 million contract (or contract component) for the 52.06 km Mekenajo to Ayra road segment and an ETB 648.55 million contract (or contract component) for the 65.5 km Chanka-Dembidolo road segment.