NORINCO provides supplier’s credit for unspecified purposes

According to Caja Autónoma de Amortización de la Deuda Pública within Equatorial Guinea’s Ministry of Finance and Budget, the Government of Equatorial Guinea contracted a supplier’s credit (loan) with NORINCO on or around 2019. The loan carried a 4.5% interest rate and an estimated maturity of 5 years. The loan’s (principal) amount outstanding was CFA 137,193,223,027 as of December 31, 2019, CFA 234,466,032,262 as of December 31, 2020, CFA 217,375,526,481 as of December 31, 2021, and CFA 83,343,110,825 as of June 30, 2022. The borrower made repayments worth CFA 55,080,588,238 (CFA 48,557,606,660 in principal and CFA 7,647,823,101 in interest) in 2021. It expected to make a principal payment of CFA 32,539,418,010 in 2022, an interest payment of CFA 1,830,342,270 in 2022, a principal payment of CFA 16,269,709,005 in 2023, and an interest payment of CFA 366,068,565 in 2023. The Government of Equatorial Guinea’s reporting to the IMF in 2021 suggests that it was in arrears to NORINCO and sought to clear the arrears in 2021.

Additional details

1. There are some indications that the NORINCO loan may have been used for the acquisition of military equipment. In March 2018, NORINCO signed a military vehicle acquisition contract with the Government of Equatorial Guinea. 41 Beiben heavy-duty trucks 2628A were shipped to Equatorial Guinea on July 9, 2018. The vehicles arrived in August 2018. On October 12, 2018, 39 (NORINCO-made) units Beiben heavy-duty trucks 2628A were featured in a military parade to celebrate Equatorial Guinea’s 50th Independence Anniversary. In Chinese, the name of this project is 赤道几内亚阅兵车项目 or 中国兵器工业集团军贸项目. 2. According to Caja Autónoma de Amortización de la Deuda Pública, the Government of Equatorial Guinea expects to fully repay the NORINCO loan by 2024, so for the time being AidData assumes a maturity length of 5 years. This issue warrants further investigation. 3. The face value of the NORINCO loan. For the time being, AidData relies upon the highest (principal) amount outstanding figure as a proxy. This issue warrants further investigation. 4. In 2021, the International Monetary Fund (IMF) reported that '[t]he authorities [in Equatorial Guinea] have external arrears to a Chinese commercial entity with which they are in good faith discussions on a new repayment calendar. In particular, the authorities and their Chinese counterparts are engaged in negotiations to revise key parameters of the borrowing framework agreement. In 2021, the authorities already made two of three debt service payments to the Chinese commercial entity that had been outstanding at end-2020, and by end-2021, at the conclusion of the negotiations, the outstanding payment would be made to the Chinese commercial entity.' There are some indications that Chinese commercial entity in question may be NORINCO. It is notable that the Government of Equatorial Guinea’s principal and interest payments to NORINCO were substantially higher in 2021 than its anticipated principal and interest payments to NORINCO in 2022 and 2023. However, this issue warrants further investigation.

Number of official sources

8

Number of total sources

11