China Eximbank provides $24 million buyer’s credit loan for Dali and Mazmoom Water Supply Project (Linked to Umbrella #57039)

China Eximbank provides $24 million buyer’s credit loan for Dali and Mazmoom Water Supply Project On July 29, 2008, China Eximbank and the Government of Sudan signed a $3 billion USD oil-backed master framework agreement (or line of credit) to finance various infrastructure projects (see Umbrella Record ID#57039).

This resources-credit cooperation package is backed by future revenues from the sale of oil exports.

One of the subsidiary loans approved through this agreement on November 4, 2009 was a $20.4 million BCL for the Dali and Mazmoom Water Supply Project.

The proceeds from this BCL were used to finance 85% of the $24 million4 commercial contract signed on November 4, 2009 with China CAMC Engineering Co., Ltd.

The project involved the construction of 140 km of water transmission pipelines, and the comprehensive survey, design, equipment supply, site installation, civil construction, acceptance and commissioning of a water treatment plant in the hamlet of Dali (دل) within Central Darfur State and a water treatment plant in the city of Mazmoom (or Al Mazmun or المزموم) within Sennar State.

These plants have a daily water treatment capacity of 20,000 m3 and 7,000 m3, respectively. On July 1, 2009, the Mazmoom Water Supply Sub-Project was completed. The Dali Water Supply Sub-project was officially completed on June 19, 2012.

There are some indications that the China Eximbank loan issued for the Dali and Mazmoom Water Supply Project may have underperformed vis-a-vis lender expectations.

According to Sudan’s Finance Minister Ali Mahmood Abdel-Rasool, China Eximbank suspended its financing for 11 projects in Sudan following the secession of South Sudan in July 2011, which triggered a major loss of oil revenue (a key source of collateral for China Eximbank loans).

Ali Mahmood Abdel-Rasool said at the time that the Government of Sudan had previously pledged oil revenues (worth 120,000 barrels per day) to China Eximbank as a source of collateral.

Then, on February 18, 2012, the Chinese Government announced that it had agreed to reschedule the outstanding debt obligations of the Government of Sudan by extending loan repayment periods by 5-years (as captured via Record ID#30421).

According to the External Debt Unit of the Central Bank of Sudan, the Government of Sudan's total arrears to Chinese creditors amounted to $3.864 billion ($2.608 billion in principal, $1.129 billion in interest, and $127 million in penalty interest) as of March 31, 2022.