Completed Mixed AidData Chinese Aid

China Eximbank provides $72 million loan for Muthurajawela Oil Tank Farm Project (Linked to Record ID#70565)

$72M USD

Funder	Export-Import Bank of China (China Eximbank)
Recipient Organization	Government of Sri Lanka
Country	Sri Lanka
Start Date	Jan 17, 2001
End Date	Jan 06, 2033
Duration	11,677 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`33184`

Grant Description

China Eximbank provides $72 million loan for Muthurajawela Oil Tank Farm Project On January 17, 2001, China Eximbank and the Government of Sri Lanka signed a $72 million loan agreement for the Muthurajawela Tank Farm Project.

📋 Loan / Grant Terms

💰 Loan Amountcarried the following borrowing terms: a maturity of 20 years

💹 Interest Rate4.2%

The borrower was expected to use the loan proceeds to finance 90% of the cost of a $79,528,000 commercial (EPC) contract. The remaining 10% was to be funded by Ceylon Petroleum Corporation (CPC). The borrower made repayments worth $5,617,530.46 (Rs. 733,575,327) in 2014 and $5,617,530.46 (Rs. 746,091,554) in 2015.

The loan's amount outstanding was $17,083,525.57 (Rs. 2,206,265,577) as of December 31, 2013, $11,288,805.10 (Rs. 1,474,168,934) as of December 31, 2014, and $5,958,954.72 (Rs. 810,280,191) as of December 31, 2015. The project involved an onshore component and an offshore component. The onshore component of the project involved 29 diesel and kerosene storage tanks and all the matching facilities.

The offshore component of the project involved a one-point mooring system and a 5.6 km submarine oil transmission pipeline.

China Huanqiu Contracting & Engineering Corporation — a construction subsidiary of China National Petroleum Corporation specializing in the construction of refineries and chemical fertilizer plants connected to refineries, and mining plants — was the EPC contractor responsible for project implementation.

Project implementation began on July 1, 2001 and ended on November 28, 2003 (two months ahead of schedule). The Muthurajawela tank farm became operational on May 27, 2004.

With the construction of this tank farm, Sri Lanka’s storage capacity for finished petroleum products increased by 250,000 tonnes. Muthurajawela tank farm consists of 21 tanks of 10,000 m3 capacity and 8 tanks of 5,000 m3 capacity. These tanks store and distribute diesel and kerosene.

Along with the tanks, CPC installed a new SPBM system, where 60,000 DWT (deadweight tonnage) ships could use the buoy for discharging imported finished products direct from sea to tanks via a submarine pipeline. This terminal includes a loading facility to distribute products by road tankers.

However, rail transportation of petroleum products stored in the Muthurajawela tank farm is constrained due to the absence of a railway line.

At the time of project completion, a dual pipeline transport systems named the ‘cross country pipeline’ with a length of 6.5 km was expected to link Muthurajawela tank farm with the Supugaskanda facility.

📋 Staff Comments

Some sources indicated that China Eximbank provided a ‘mixed credit’ (perhaps a buyer’s credit and a government concessional loan). However, AidData has not yet identified any official evidence of multiple loans with different terms for this project.
This project is linked to a $3.6 million grant for the Muthurajawela oil tank farm in 2000 (as captured via Project ID#70565).
The Government of Sri Lanka loan key number is 2001079.
One source (https://static1.squarespace.com/static/5652847de4b033f56d2bdc29/t/638689771d0e3c4beb14bf2f/1669761400150/Briefing+Paper+-+Sri+Lanka+Debt+-+V5.pdf) suggests that the borrower was Ceylon Petroleum Corporation — a Sri Lankan SOE — rather than the Government of Sri Lanka. This issue warrants further investigation.
The Chinese project title is 里兰卡油罐区项目.
The PBOC refers to the project as being supported by a 'mixed loan agreement'. See http://www.pbc.gov.cn/bangongting/135485/135495/135497/2856398/index.html

📚 Sources & References

Contract on Oil Product Storage and Transportation between China and Sri Lanka.
Sri Lanka
China sign deal to build oil tank farm
Sri Lanka Oil Tank Project Starting Construction.(Brief Article)
Lanka to expand oil storage capacity
Govt. to drill for oil and gas
China helps Lanka to improve oil storage capacity
PROJECT COMPLETION REPORT ON THE EMERGENCY REHABILITATION OF PETROLEUM STORAGE FACILITIES PROJECT
贾庆林在科伦坡参观中斯合作项目
中国寰球工程公司承建的斯里兰卡M罐区项目竣工开业
Ceylon Petroleum Corporation (CPC) Muthurajawela Tank Farm Project
Sri Lanka
Appendix
Sri Lanka
China Sign Accord on Construction of Oil Tanks
Lanka
China sign deal to build oil tank .. Read more at: http://timesofindia.indiatimes.com/articleshow/9946800.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst, 2016 Annual Report
Govt will not sell oil tanks: Susil
Energy Balance 2017
Photo Archive --- Date:20031130
Public Investment supported by Export Credit
Financial Statements 2014
PARLIAMENTARY DEBATES (HANSARD)
Instrument-wise Details of Central Government External Debt obtained under Foreign Law as at 2022/06/30
Financial Statements 2015
Evolution of Chinese Lending to Sri Lanka Since the mid-2000s - Separating Myth from Reality
China-Sri Lanka Relations in Infrastructure Development
PARLIAMENTARY DEBATES (HANSARD) Friday, 20th March, 2009 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.

All Grantees

Government of Sri Lanka

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