CET provides $1.002 billion supplier's credit for 500kV Power Transmission Line of the Great Ethiopian Renaissance Dam (GERD) Project

📋 Staff Comments

1. This project was also known as the GDHA 500 kV Power Transmission and Transformation Project and the Grand Renaissance Dam-Transmission and Sub-station Dedesa-Holeta 500Kv Project, the Grand Renaissance Dam-Transmission and Sub-station Dedesa-Holeta 500Kv Project, and the GERD-Dedesa-Holeta-Akaki (GDHA) 500KV power transmission and transformation project. The Chinese project title is 塞俄比亚复兴大坝500千伏输电项目 or 塞俄比亚复兴大坝水电站500千伏送出工程 or GDHA 埃塞俄比亚复兴大坝 500KV 超高压输变电项目 or 埃塞复兴大坝输变电工程项目.
2. The Ethiopian Electric Power Corporation (EEPC) is a state-owned enterprise.
3. Some sources identify the total cost of the commercial contract as $1.458 billion rather than $1.2 billion. This issue warrants further investigation.
4. The system identification number for the CET loan (supplier’s credit) in the Government of Ethiopia’s Aid Management Platform (AMP) is 87143319101798. The AMP identifies the value this loan commitment as ETB 18,642,572,862. 1 Ethiopian Birr (ETB) was equal to 0.53 United States Dollars (USD) in April 2013 (at the time that the loan agreement was signed).
5. In a typical receivables financing agreement (or deferred payment agreement), the company that the project owner in the host country has selected as its engineering, procurement, and construction (EPC) contractor is also a lender to the project owner. The company assigns receivables under its EPC contract with the project owner to one of or more banks. Upon assignment of receivables, the bank or banks will release funds to the company so it can discharge its obligations under the receivables financing agreement as a lender. Receivables financing is also known as accounts receivable financing (finance) or A/R financing (finance) or 应收账款融资 (in Chinese). These other terms are used because the accounts receivable of a company (i.e., unpaid invoices) are being used as collateral to unlock working capital—typically in the form of a bank loan (‘receivables loan’). Sellers often face cash flow problems when their buyers do not make full payment at the due date of the invoice. A receivables financing arrangement addresses this problem by allowing them to sell their outstanding invoices to a bank at a discounted rate. This approach allows the seller to receive the remaining invoice amount before the due date of the invoice. The bank either gets its money back at invoice maturity through the seller (acting as a collecting agent) or directly from the debtor.
6. More research is needed to identify the precise date on which the CET debt rescheduling agreement was signed. One source suggests that it may have come shortly after April 9, 2019 (see https://repub.eur.nl/pub/134509/final-thesis-valeria-lauria-nov-2020.pdf).
7. The loan identification number in the Government of Ethiopia’s Debt Management and Financial Analysis System (DMFAS) is 20847000 and the corresponding project name in DMFAS is ‘DEDESSA-HOLETA 500KV’. 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

📚 Sources & References

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• 公司签订埃塞俄比亚复兴大坝500千伏输电项目总承包合同
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