ICBC provides $460.07 million loan for Gibe III Hydro Power Generating Set Project (Linked to Record ID#34447, 59363, 59365)

📋 Staff Comments

1. According to the World Bank's Debtor Reporting System (DRS), the weighted average grace period of all ‘private’ sector lending from all Chinese creditors to government and government-guaranteed borrowing institutions in Ethiopia was 3.1666-years in 2013. AidData estimates the grace period of the CET loan by using this figure. See https://www.dropbox.com/scl/fi/g794svts1vdwnvksjllsh/August-2024-IDS-Download-Ethiopia-s-Borrowings-and-Borrowing-Terms-from-Private-Sector-PRC-Creditors.xlsx?rlkey=i6j0mqp1jrx5en6xll3ebgl3g&dl=0.
2. According to the World Bank's Debtor Reporting System (DRS), the weighted average maturity of all ‘private’ sector lending from all Chinese creditors to government and government-guaranteed borrowing institutions in Ethiopia was 13.7792-years in 2013. AidData estimates the maturity of the CET loan by using this figure. See https://www.dropbox.com/scl/fi/g794svts1vdwnvksjllsh/August-2024-IDS-Download-Ethiopia-s-Borrowings-and-Borrowing-Terms-from-Private-Sector-PRC-Creditors.xlsx?rlkey=i6j0mqp1jrx5en6xll3ebgl3g&dl=0.
3. According to the World Bank's Debtor Reporting System (DRS), the weighted average interest rate of all ‘private’ sector lending from all Chinese creditors to government and government-guaranteed borrowing institutions in Ethiopia was 2.9872% in 2013. AidData estimates the interest rate of the CET loan by using this figure. See https://www.dropbox.com/scl/fi/g794svts1vdwnvksjllsh/August-2024-IDS-Download-Ethiopia-s-Borrowings-and-Borrowing-Terms-from-Private-Sector-PRC-Creditors.xlsx?rlkey=i6j0mqp1jrx5en6xll3ebgl3g&dl=0.
4. According to the World Bank's Debtor Reporting System (DRS), ‘private’ sector lending from all Chinese creditors to government and government-guaranteed borrowing institutions in Ethiopia was $1,802,970,000 in 2013. $1,802,970,000 is nearly identical to the sum of the face value of the $1,002,970,414 CET loan that supported the 500kV Power Transmission Line of the Great Ethiopian Renaissance Dam (GERD) Project, the $250 million ZTE supplier’s credit that supported the Telecom Transformation and Expansion 6 Circles Project (with support from a China Eximbank export seller’s credit), the $460.07 million ICBC loan that support the Gibe III Hydro Power Generating Set Project, and the $88.51 million loan (from China Eximbank and potentially other Chinese creditors) that supported the Gibe III Hydro Power Transmission and Transformation Substation Project. See https://www.dropbox.com/scl/fi/g794svts1vdwnvksjllsh/August-2024-IDS-Download-Ethiopia-s-Borrowings-and-Borrowing-Terms-from-Private-Sector-PRC-Creditors.xlsx?rlkey=i6j0mqp1jrx5en6xll3ebgl3g&dl=0 and https://www.sciedupress.com/journal/index.php/jms/article/viewFile/25488/16079.
5. This ICBC loan was 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.
6. It was originally envisaged that the European Investment Bank (EIB) and the African Development Bank (AFDB) would help financed the EUR 1.47 billion Gibe III Hydropower Project (https://web.archive.org/web/20160306153555/http://www.gibe3.com.et/Financer.html). However, ICBC stepped into the breach when the EIB and the AFDB withdrew their support.
7. The system identification number for this project in the Government of Ethiopia’s Aid Management Platform (AMP) is 87143123101610. The AMP indicates that 15 loan disbursements worth ETB 21,904,463,534 ($1,642,834,765.05) were made in support of the project. This amount far exceeds the face value of the ICBC loan that was signed on June 20, 2010 (as captured via Record ID#34447). Therefore, it likely captures the $470 million ICBC loan from 2010 and the $460.07 million ICBC loan from 2013. This issue warrants further investigation.
8. China Eximbank financed the Gibe III-Addis Ababa Power Transmission Lines and Substations Project (as captured via Record ID#59363 and Record ID#59365) and the Gibe III Hydro Power Transmission and Transformation Substation Project (as captured via Record ID#105831).
9. The face value of the loan ($460.07 million) is identified by Ethiopia's Ministry of Finance and Economic Development (MOFED) via the following sources (https://www.sciedupress.com/journal/index.php/jms/article/viewFile/25488/16079 and https://www.dropbox.com/scl/fi/5nwg72mj7unyc41tgsmh1/List-of-Ethiopia-China-Cooperation-Major-Projects-from-Ethiopia-s-Ministry-of-Finance-September-2024.xlsx?rlkey=v9vjryd8kmq0bzshgocuma6mb&dl=0).

📚 Sources & References

• Background
• Gibe III HPP
• Project Financing
• Gibe III Hydroelectric Project
• Gilgel Gibe III Hydroelectric Power Project
• August 2024 Ethiopia's Borrowings and Borrowing Terms from 'Private' Sector PRC Creditors
• Infrastructure Development in Ethiopia and Its Impact on Economic Diplomacy With China
• Gilgel Gibe III dam
• Ethiopia, “东非水塔”变“东非电塔” 东方 电气承建非洲“三峡工程”
• Gibe III Hydropower Plant
• CONCLUSIONS REPORT
• Complaint on lack of transparency concerning the Gilgel Gibe 3 operation
• GIBE III hydropower project
• EIB’s clarification of involvement in Gibe 3 project and commitment to East African energy sector
• Ethiopia - Gibe III-1b Hydroelectric Power Project (Compliance review) – Management Response
• List of Ethiopia- China Cooperation Major Projects from Ethiopia's Ministry of Finance September 2024 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.