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Overview

China Construction Bank contributes to tranche 1 of $325 million export financing facility to Hyundai for the construction of the Jebel Ali Power and Desalination Station ‘L’ Phase 2 (Linked to Record ID#99011, #99012, #99013, #99021, #99022)

Commitments (Constant USD, 2023)$19,486,546
Commitment Year•2005Country of Activity•United Arab EmiratesDirect Recipient Country of Incorporation•KoreaSector•Water Supply And SanitationFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Sep 13, 2005
Start (actual)
Sep 13, 2005
End (actual)
Jan 1, 2008
Last repayment (originally scheduled)
Sep 12, 2010

Stakeholders

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

Funding agencies

State-owned Commercial Banks

  • China Construction Bank Corporation (CCB)

Cofinancing agencies

Private Sector

  • Arab Bank
  • Korea Exchange Bank (KEB)
  • Mashreqbank PSC
  • Raiffeisen Zentralbank Österreich A.G. (RZB)
  • Union de Banques Arabes et Francaises (UBAF)

State-owned Banks

  • Abu Dhabi Commercial Bank PJSC (ADCB)
  • Emirates NBD Bank P.J.S.C.

State-owned Commercial Banks

  • Bank of China (BOC)

Receiving agencies

Private Sector

  • Hyundai Engineering and Construction Co., Ltd. (HDEC)

Implementing agencies

Private Sector

  • Fisia Italimpianti
  • Hyundai Engineering and Construction Co., Ltd. (HDEC)

Guarantors

State-owned companies

  • Korea Trade Insurance Corporation (K-sure)

Loan description

2005 syndicated $325 million USD export financing facility from CCB, BoC, and others to Hyundai for the construction of the Jebel Ali Power and Desalination Station ‘L’ Phase 2 in the UAE

Interest rate (t₀)•4.41375%Interest type•Variable Interest RateLoan tenor•6-month rateMaturity•5 years

Narrative

Full Description

Project narrative

On September 13, 2005, China Construction Bank (CCB) and Bank of China (BOC) each contributed an estimated $36.11 million to a $325 million multi-tranche export finance loan facility to Hyundai for the construction of the Jebel Ali Jebel Ali Power and Desalination Station ‘L’ Phase 2, commissioned by the Dubai Electricity & Water Authority (DEWA). The first tranche, captured at #99010 for CCB and #99011 for BOC, was a performance-based facility with an estimated size of $87.5 million, a maturity of five (5) years, and an interest rate of 40bps (0.4%) plus contemporary LIBOR. The second tranche, captured at #99012 for CCB and #99013 for BOC, was an advance payment guarantee facility with an estimated size of $87.5 million, a maturity of three (3) years, and an interest rate of 35bps (0.35%) plus contemporary LIBOR. The third tranche, captured at #99021 for CCB and #99022 for BOC, was an import and refinancing Letter of Credit (LC) facility with a size of $150 million, a two (2) year grace period, and a stipulation that the facility must be refinanced within 90 days. The import portion of the facility had an interest rate of 60bps (0.6%) while the refinancing portion had an interest rate of 90bps (0.9%). Nine (9) known institutions participated in the lending syndicate. Arab Bank acted as sole mandated lead arranger (MLA). Mashreqbank, Abu Dhabi Commercial Bank (ADCB), and Korea Exchange Bank (KEB) acted as arrangers. Raiffeisen Zentralbank acted as co-arranger. Emirates NBD and China Construction Bank (CCB) acted as lead managers. Bank of China (BOC) and Union de Banques Arabes et Francaises (UBAF) acted as managers. The performance and advance payment guarantee facilities were fully and unconditionally guaranteed by Korea Trade Insurance Corporation (K-Sure). The loan was originally oversubscribed by an unknown amount. Hyundai Engineering & Construction Co. and Fisia Italimpianti, a subsidiary of Impregilo, were jointly awarded the engineering, procurement, and construction (EPC) contract. The project had a contract value of $696 million and was transferred to DEWA upon completion in 2008. The project was expected to supply 1,200MW of electricity and 80 million gallons of water per day.

Staff comments

1. For the time being, AidData is estimating each Chinese contribution ($9.72 million) to this tranche through a two step process. First, the full amount of the reported performance and advance payment guarantee facilities ($175 million) was divided by the number of tranches (2). Then, the derived tranche amount ($87.5 million) was divided by the number of known lenders (9).