Completed Mixed AidData Chinese Aid

China Eximbank provides $12.65 million loan for FGG-1 230kV Finchaa-Ghedo-Gefersa Power Transmission Project (Linked to Record ID#45047)

$12.66M USD

Funder	Export-Import Bank of China (China Eximbank)
Recipient Organization	Commercial Bank of Ethiopia (CBE)
Country	Ethiopia
Start Date	Feb 24, 2008
End Date	Jul 28, 2026
Duration	6,729 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`105635`

Grant Description

China Eximbank provides $12.65 million loan for FGG-1 230kV Finchaa-Ghedo-Gefersa Power Transmission Project In November 2006, China Eximbank and the Government of Ethiopia’s Ministry of Finance and Economic Development signed a $500 million buyer’s credit facility agreement (互惠贷款) — also known as a master loan framework agreement and a master facility agreement — for an unspecified set of development projects.

📋 Loan / Grant Terms

💰 Loan Amountfacility agreement (captured via Record ID#45047) carried the following borrowing terms: a 13-year maturity

📅 Maturity13 years

⏳ Grace Period4 years

All of the subsidiary loans were secured with (i.e., collateralized against) Ethiopia's export receipts to China, which at the time primarily consisted of sesame seed export receipts.

The buyer’s credit facility agreement also required that all Ethiopian exports (export receipts) to China to be overseen by the Commercial Bank of Ethiopia (CBE), the country’s largest state-owned financial institution.

As a source of collateral, the borrower was required to maintain a minimum cash balance in a debt service reserve account (DSRA) at the CBE.

The cash balance of the DSRA (escrow account) was $284,368,041 as of June 30, 2011, $308,914,767 as of June 30, 2012, $300,000,000 as of June 30, 2016, $300,000,000 as of June 30, 2017, $300,000,000 (ETB 8,260,410,000) as of June 30, 2018, $300,000,000 as of June 30, 2019, ETB 10,599,600,000 as of June 30, 2020, ETB 8,058,726,059 as of June 30, 2021, ETB 10,722,750,953 as of June 30, 2022, and ETB 9,832,603,839 as of June 30, 2023. 16 subsidiary loans for 16 different projects were reportedly approved under the buyer’s credit facility agreement.

China Eximbank, CBE, and the Ethiopian Electric Power Corporation (EEPCo) signed a subsidiary buyer’s credit loan worth $12,657,046.86 for the FGG-1 230kV Finchaa-Ghedo-Gefersa Power Transmission Project on February 24, 2008. The loan's first and last scheduled principal payment dates were December 31, 2011 and March 31, 2021, respectively.

Its first and last scheduled interest payment dates were July 1, 2009 and March 31, 2021, respectively.

The borrower was expected to use the proceeds of the loan to finance approximately 85% of the cost of a ETB 135,000,061.80 commercial contract between the Ethiopian Electric Power Corporation (EEPCo) — an Ethiopian state-owned enterprise — and China Gezhouba Group Company (CGGC).

The project involved the acquisition and installation of equipment — including transformers, outgoing line bays, and transformers bays — at the Fincha’a-1, Fincha’a-2, Ghedo, and Gefersa substations. CGGC was the general EPC contractor responsible for project implementation. The project was completed and put into operation in 2011.

📋 Staff Comments

For loan and debt rescheduling records with variable interest rates, AidData calculates the all-in interest rate at T0 based on the reference rate (such as LIBOR or EURIBOR) on the loan start date, plus any known margin. Please see the methodology for additional details.
This buyer's credit loan from China Eximbank is not included in the database of Chinese loan commitments that SAIS-CARI released in 2020 and re-released in 2021. Nor was it included it in the Chinese Loans to Africa (CLA) Database — that is maintained by Boston University's Global Development Policy Center — as of August 2024.
AidData relies on the USD face value of the loan reported by MOFED through the following

📚 Sources & References

https://www.sciedupress.com/journal/index.php/jms/article/viewFile/25488/16079 and https://www.dropbox.com/scl/fi/7nrczfanixvivmiyzqx3i/MOFED-Loan-Level-Data-on-Borrowing-Terms-and-Loan-Performance-September-2024_OTHER_PUBLIC.xlsx?rlkey=5sqhh9ii4t3x8cmz0jf6s7cod&dl=04. The Chinese project title is 埃塞俄比亚FGG-1 230KV输电线路工程. 5. According to CBE's financial statements for the year ending on June 30, 2012 (https://www.combanketh.et/cbeapi/uploads/2011_12_2037357399.pdf), 'CBE is the administrator of the total loan of USD 499,222,780, granted by EXIM Bank of China to the Ethiopian Electric Power Corporation (EEPCO) and Muger Cement Enterprise (MCE). The said loans are repayable by EEPCO and MCE to CBE in Birr over a period of ten years.' 6. The loan identification number in the Government of Ethiopia’s Debt Management and Financial Analysis System (DMFAS) is 20776011 and the corresponding project name in DMFAS is ‘FINCHA-GEDO-GEFERSA I SUBSTATI’. See https://www.dropbox.com/scl/fi/7nrczfanixvivmiyzqx3i/MOFED-Loan-Level-Data-on-Borrowing-Terms-and-Loan-Performance-September-2024_OTHER_PUBLIC.xlsx?rlkey=5sqhh9ii4t3x8cmz0jf6s7cod&dl=0. 7. As of September 2024, the Government of Ethiopia recorded the loan's all-in interest rate as 2% in DMFAS (see https://www.dropbox.com/scl/fi/7nrczfanixvivmiyzqx3i/MOFED-Loan-Level-Data-on-Borrowing-Terms-and-Loan-Performance-September-2024_OTHER_PUBLIC.xlsx?rlkey=5sqhh9ii4t3x8cmz0jf6s7cod&dl=0), which suggests the possibility of a debt rescheduling involving an interest rate reduction. This issue warrants further investigation Sources: CBE Annual Report 2011-2012
INVITATION TO BID Ethiopian Electric Power Corporation
Infrastructure Development in Ethiopia and Its Impact on Economic Diplomacy With China
List of Ethiopia- China Cooperation Major Projects from Ethiopia's Ministry of Finance September 2024
MOFED Loan-Level Data on Borrowing Terms and Loan Performance September 2024_OTHER_PUBLIC Loan applications and disbursements are still being received and processed as the projects continue to evolve. Ongoing monitoring and evaluation are in place to ensure project continuity.

All Grantees

Commercial Bank of Ethiopia (CBE)

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