China Eximbank provides $119 million buyer’s credit loan for 340 km Renk-Malakal Road Construction Project (Linked to Record ID#57039, #54079)

China Eximbank provides $119 million buyer’s credit loan for 340 km Renk-Malakal Road Construction Project On July 29, 2008, China Eximbank and the Government of Sudan signed a $3 billion oil-backed master framework agreement (or line of credit) to finance various infrastructure projects (as captured via 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 in 2009 was a $119 million BCL for the 340 km Renk-Malakal Road Construction Project.

The proceeds of the loan were used to be used by the borrower to partially finance a $220 million commercial contract with Sinohydro.

The project involved the construction of a 340 km road from the city of Renk (الرنك) in Upper Nile State to the city of Malakal (ملكال) in Upper Nile State. Sinohydro was the contractor responsible for project implementation. A foundation stone laying ceremony took place on April 21, 2009.

However, Sinohydro reportedly halted construction with only 180 km of the road completed. It is unclear whether the Chinese contractor ever finished this project.

There are some indications that the China Eximbank loan issued for the Renk-Malakal Road Construction 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.