China Eximbank provides RMB 1.45 billion government concessional loan for Phase 1 of Addis Ababa Bole International Airport Expansion Project (Linked to Record ID#58583)

China Eximbank provides RMB 1.45 billion government concessional loan for Phase 1 of Addis Ababa Bole International Airport Expansion Project On December 19, 2013, the Government Ethiopia's Ministry of Finance and Economic Development and China Eximbank signed an RMB 1.45 billion ($225 million or ETB 4,302,103,250) government concessional loan (GCL) agreement [CHINA EXIMBANK GCL No. 2013 (58) Total No (503) 1420303052013112665] for Phase 1 of Addis Ababa Bole International Airport Expansion Project.

Then, on April 3, 2014, the Ethiopian House of Representatives ratified the GCL agreement under Proclamation No. 833/2014, and the agreement entered into force on May 14, 2014.

The Government of Ethiopia subsequently on-lent the proceeds of the loan to Ethiopian Airports Enterprise (EAE) -- a state-owned entity tasked with administering Ethiopia's airports.

The loan's first and last scheduled principal payment dates were September 21, 2021 and March 21, 2035, respectively. Its first and last scheduled interest payment dates were September 21, 2014 and March 21, 2034, respectively.

The borrower was expected to use the proceeds of the GCL to finance a $225 million commercial (EPC) contract between Ethiopian Airports Enterprise (EAE) — the state-owned entity tasked with administering Ethiopia's airports — and China Communications Construction Company Ltd (CCCC), which was signed in 2012.

Then, on December 27, 2016, China Eximbank and the Government of Ethiopia signed a $117,300,000 (ETB 2,623,784,348) preferential buyer’s credit (PBC) agreement for Phase 2 of the Addis Ababa Bole International Airport Expansion Project (also known as the Addis Ababa Bole International Airport Terminal 1, VIP Terminal, Associated Works Design and Build Project).

The Ethiopian House of Representatives ratified the PBC (loan) agreement, which is captured via Record ID#58583, on February 7, 2017. The Government of Ethiopia subsequently on-lent the proceeds of the loan to EAE.

The loan's first and last scheduled principal payment dates were July 21, 2024 and January 21, 2037, respectively. Its first and last scheduled interest payment dates were January 21, 2018 and July 21, 2037, respectively.

The borrower was expected to use the proceeds from the PBC to finance 85% of the cost of a $138 million commercial contract between EAE and China Communications Construction Company Ltd (CCCC).

According to the Government of Ethiopia’s Aid Management Platform (AMP), the RMB 1.45 billion (ETB 4,302,103,250) loan for Phase 1 achieved a 94% disbursement rate, with China Eximbank making 13 loan disbursements (worth ETB 4,026,390,597) between 2014 and 2021: an ETB 1,337,936,270 disbursement on June 30, 2014, an ETB 492,880,459 disbursement on September 29, 2015, an ETB 92,355,395 disbursement on December 25, 2015, an ETB 112,708,268 disbursement on June 30, 2016, an ETB 87,995,364 disbursement on October 28, 2016, an ETB 72,608,708 disbursement on November 10, 2016, an ETB 104,044,632 disbursement on December 28, 2016, an ETB 194,937,102 disbursement on May 22, 2017, an ETB 192,560,193 disbursement on June 16, 2017, an ETB 59,554,658 disbursement on September 1, 2017, an ETB 197,578,705 disbursement on March 30, 2018, an ETB 469,626,880 disbursement on March 19, 2020, and an ETB 611,603,963 disbursement on January 11, 2021.

According to the Government of Ethiopia’s AMP, the $117,300,000 (ETB 2,623,784,348) loan for Phase 2 achieved a 37% disbursement rate, with China Eximbank making a single disbursement of ETB 962,974,366 on December 22, 2017.

The shared purpose of the project's two phases was to increase the annual passenger handling capacity of Addis Ababa Bole International Airport from the 7 million to 22 million.

These two projects involved the expansion of an existing terminal (Terminal 1) with a floor area of 30,000 square meters for domestic and regional trips, the construction of a new terminal (Terminal 2) with a floor area of 74,000 square meters for international trips, and the construction of a VIP terminal.

Upon completion, Terminal 2 was expected to have three floors—arrival, departure and ground floors — and include boarding areas, lounges, recreation centers, shopping malls, offices, parking, and other facilities.

The VIP terminal — designed for use by leaders, senior government officials, diplomats and other dignitaries — was expected to includes various saloons, lounges, conference rooms, recreation centers, duty-free shops, an IT center and an exclusive parking lot.

Addis Ababa Bole International Airport is located in the Bole area of the city of Addis Ababa, 6 km (3.7 mi) southeast of the city center and 65 km (40 mi) north of Debre Zeyit. Its coordinates are 08°58′40″N 38°47′58″E. CCCC was the general EPC contractor responsible for project implementation.

Its work was overseen by EAE.

The French construction firm ADP Ingénierie supervised construction activities, while the design of the project was managed by CPG Corporation Pte. Ltd., a Singaporean company. Shanxi Construction investment Group Co. Ltd was also involved in the project (most likely as a subcontractor). The purpose of the $225 million EPC contract between CCCC and EAE was to construct Terminal 2 (‘Phase 1’).

The purpose of the $138 million EPC contract between CCCC and EAE was to construct the VIP terminal and expand Terminal 1 (‘Phase 2’). Phase 1 construction activities began in June 2014. By December 11, 2016, Phase 1 had achieved a 40% completion rate.

Phase 1 was originally expected to reach completion by January 2018 (in time for the 30th Ordinary Summit of the African Union). However, it was ultimately completed and officially inaugurated on January 27, 2019. The inauguration ceremony was attended by Ethiopian Prime Minister Abiy Ahmed. Phase 2 implementation activities commenced in September 2017 and were still underway four years later.

On March 30, 2021, Prime Minister Abiy Ahmed visited the new VIP terminal being built at the Addis Ababa Bole International Airport. Phase 2 was originally scheduled for completion on May 15, 2021. However, as of April 2022, AidData had not yet found any evidence of project completion.

There are some indications that the China Eximbank loan for Phase 1 of the Addis Ababa Bole International Airport Expansion Project may have financially underperformed vis-a-vis the original expectations of the lender.

According to the Government of Ethiopia’s Aid Management Platform, as of September 2019, ICBC suspended about $67 million worth of loan disbursements 'due to [the] cross-default situation of the country’ (see Record ID#58616).

Then, in August 2021, China Eximbank withheld $339 million loan disbursements for 12 projects and halted project implementation due to Government of Ethiopia’s rapidly dwindling foreign exchange reserves and debt sustainability challenges.

Then, after considerable delay, the G20 Common Framework (CF) creditor committee for Ethiopia convened in September 2021, with the French Government and the Chinese Government serving as co-chairs. The CF debt rescheduling talks were still ongoing in mid-2023.