China Eximbank provides $199.58 million loan for Gibe III Hydro Power Transmission and Transformation Line Project

📋 Staff Comments

1. The face value of the loan ($199.58 million) is identified by 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).
2. This China Eximbank 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.
3. 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 $669,046,000 in 2010. $669,046,000 is nearly identical to the sum of the face value of the $199.58 million China Eximbank loan that supported the Gibe III Hydro Power Transmission and Transformation Line Project and the $470 million ICBC loan that supported the 1870MW Gilgel Gibe III Hydropower Project in 2010. However, the apparent treatment of China Eximbank as a 'private' sector creditor suggests that the $199.58 million may have been a syndicated loan (with China Eximbank participation). This issue warrants further investigation. 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. The borrowing terms of the China Eximbank loan for the Gibe III Hydro Power Transmission and Transformation Line Project are unknown. For the time being, AidData assumes that the borrowing terms that applied to the China Eximbank loans for the Gibe III-Addis Ababa Power Transmission Lines Project and the Gibe III-Addis Ababa Substations Project (an interest rate of 2%, a grace period of 8-years, and a maturity of 21-years) also applied to the China Eximbank loan for the Gibe III Hydro Power Transmission and Transformation Line Project. This issue warrants further investigation.

📚 Sources & References

• Public Sector Debt Statistical Bulletin: Bulletin No. 7 (2006/07-2010/11)
• Public Sector Debt Statistical Bulletin - No.7
• Public Sector Debt Statistical Bulletin No_6
• 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
• 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.