China Eximbank provides RMB 280 million government concessional loan for Bafoussam and Limbe Stadiums Project

China Eximbank provides RMB 280 million government concessional loan for Bafoussam and Limbe Stadiums Project On August 3, 2009, Chinese and Cameroonian government officials signed a framework agreement in which China pledged to offer a concessional loan to Cameroon.

Then, on November 5, 2009, China Eximbank and the Cameroon Ministry of Economy, Planning, and Regional Development officially signed the government concessional loan (GCL) agreement [CHINA EXIMBANK GCL NO. (2009) 27 TOTAL NO. (278)] worth RMB 280 million for the Bafoussam and Limbe Stadiums Project (or 喀麦隆体育场项目).

The borrower was expected to use the loan proceeds to finance a commercial contract (CAM-CAMC/SPORTS/001-1) between China National Machinery and Equipment Import and Export Corporation (CMEC) and the Cameroon Ministry of Economy, Planning, and Development, which was signed on June 10, 2009.

As of December 31, 2020, the loan had achieved a 100% disbursement rate and its outstanding amount was equivalent to CFA 16.3 billion.

CMEC was responsible for the design, materials, construction, installation, commissioning, and training for the major structure, decoration, an awning and its steel structure, water supply, and drainage system, an extra-low voltage supply system, and a low voltage supply system. Each stadium was designed to seat approximately 20,000 people.

The groundbreaking ceremony for Limbe Stadium was held on December 18, 2009, and the completion ceremony took place on January 26, 2016.

The groundbreaking ceremony for Bafoussam stadium was held on December 19, 2009, and the completion ceremony took place on April 30, 2016.

There are some indications that the China Eximbank loan for the Bafoussam and Limbe Stadiums Project may have financially underperformed vis-a-vis the original expectations of the lender. In January 2019, Cameroon unilaterally withheld debt service payments to China Eximbank. The lender responded by withholding new loan disbursements.

Then, in July 2019, China Eximbank and the Government of Cameroon signed a debt rescheduling agreement (as captured via Record ID#88213).

Under the terms of the agreement, China Eximbank agreed to reschedule 18 loans previously contracted by the Government of Cameroon — with scheduled principal repayments between July 2019 and March 2022 — by allowing the borrower to defer scheduled principal repayments between July 2019 and March 2022 to later dates but without any maturity extensions.

The total amount of restructured debt was equivalent CFA 148 billion ($253 million) — or 70% of the loan principal that was scheduled for repayment between July 2019 and March 2022.

Under the terms of the agreement, the Government of Cameroon agreed to repay 30% of the loan principal according to the original July 2019-March 2022 schedule (i.e. without any payment deferrals).

The lender and the borrower also agreed to cancel the committed but undisbursed loan balances worth approximately CFA 10 billion (for certain loans with disbursement deadlines that had already passed).

Then, in January 2020, the International Monetary Fund (IMF) classified the Government Cameroon as facing a high risk of debt distress.

Eighteen months later, during an address before Cameroon’s National Assembly on June 28, 2021, the Minister of Water and Energy (MINEE) Gaston Eloundou Esommba provided an update on the ICBC-financed Bini à Warak Hydroelectric Power Plant Project.

He noted that the project had been 'on hold' since November 2019 because ICBC suspended the loan agreement, even though the Government of Cameroon had already mobilized XAF 22 billion of counterpart funding.

He also explained that 'the reason for this suspension is that Cameroon did not settle some of its debts towards China on time, so, it is in a cross-default situation.’