CRBC provides $114.5 million loan to help Government of Equatorial Guinea clear payment arrears under 13 construction contracts

📋 Staff Comments

1. The August 2019 loan agreement (memorandum of understanding) can be accessed in its entirety via https://www.dropbox.com/scl/fi/jva4hclpdmk2qu7eufhbz/Nuevo_borrador_del_MOU_de_la_emision_de_los_bonos.doc.pdf?rlkey=gfaw2dywfgjozzolh317eo47k&dl=0.
2. A list of the Government of Equatorial Guinea’s payment arrears to CRBC — under 13 construction contracts — can be accessed via https://www.dropbox.com/scl/fi/ysqv1rsogl69t7bacprtw/Nuevo-anexo.pdf?rlkey=43qwvvfm3gd88f3748j4pfmb0&dl=0.
3. There is some evidence (https://diariorombe.es/economia/guinea-ecuatorial-emite-bonos-del-estado-por-1146-millones-de-dolares-para-saldar-su-deuda-con-china-road-hasta-junio-de-2026/ ) that suggests that this loan may have been collateralized against a minimum cash balance (equivalent to one semi-annual principal and interest payment) in a deposit account at the Autonomous Fund of Equatorial Guinea’s Ministry of Finance. This issue warrants further investigation.
4. A September 2021 IMF report states that “the authorities […] have external arrears to a Chinese commercial entity with which they are in good faith discussions on a new repayment calendar. In particular, the authorities and their Chinese counterparts are engaged in negotiations to revise key parameters of the borrowing framework agreement. In 2021, the authorities already made two of three debt service payments to the Chinese commercial entity that had been outstanding at end-2020, and by end-2021, at the conclusion of the negotiations, the outstanding payment would be made to the Chinese commercial entity.’ It is unclear if the Chinese commercial entity in question is CRBC. This issue warrants further investigation.

📚 Sources & References

• Guinea Ecuatorial emite bonos del Estado por 114,6 millones de dólares para saldar su deuda con China Road hasta junio de 2026
• BALANCE DE LOS ACREDEDORES
• Lista de la Auditoría del Reembolso de los Atrasos por Medio de la Emisión de los Bonos del Estado (Fase I)
• MEMORÁNDUM DE ENTENDIMIENTO RELATIVO AL REEMBOLSO DE LOS ATRASOS DERIVADOS POR LA CONSTRUCCIÓN DE OBRAS Y LOS SERVICIOS - 2019, [Email correspondence with subject 'Nuevo borrador del MOU y el anexo de la emisión de los bonos del Estado - CHINA ROAD'] 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.