Completed Mixed AidData Chinese Aid

China Eximbank provides $29.26 million preferential buyer’s credit for Pakbeng Mekong Bridge Project

$29.26M USD

Funder	Export-Import Bank of China (China Eximbank)
Recipient Organization	Government of Laos
Country	Lao People's Democratic Republic
Start Date	Jun 01, 2010
End Date	Feb 04, 2032
Duration	7,918 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`35713`

Grant Description

China Eximbank provides $29.26 million preferential buyer’s credit for Pakbeng Mekong Bridge Project In 2010, China Eximbank and the Government of Laos signed a $29.26 million preferential buyer’s credit (PBC) agreement for the Pakbeng Mekong Bridge Project.

📋 Loan / Grant Terms

📅 Maturity20.0281 years

⏳ Grace Period7.2533 years

💹 Interest Rate2.0702%

The loan proceeds were to be used by the borrower to finance 95% of the cost of a $30.8 million commercial (EPC) contract with China Road and Bridge Corporation (CRBC).

The project involved the construction of the 379 meter long and 13 meter wide Pakbeng Mekong River Bridge (with 1.5 meter sidewalks on both sides, a reinforced concrete continuous beam structure, and a bridge approach that is 321 meters long) in the district of Pakbeng.

The purpose of this two-way two-lane bridge — with a designed driving speed of 60km/hour — was to connect Oudomxay Province and Xaiyabuli (Sainyabuli) Province. The bridge is also an important overland connection point between Yunnan, China and Northern Thailand via Laos.

The bridge links National Road No. 2W and No. 2E and facilitates the transportation of goods between the two provinces and other northern neighboring countries. CRBC was the EPC contractor responsible for implementation. A foundation stone laying and project commencement ceremony took place on December 23, 2012.

The originally anticipated project completion date was March 22, 2015. The project passed final inspection on February 29, 2016. The bridge was was formally completed and opened to traffic on March 5, 2016. Then, the Lao Ministry of Transport issued a final project handover certificate on March 29, 2017.

Upon completion, the bridge replaced a ferry service across the Mekong River.

There are multiple indications that the China Eximbank loan for this project may have financially underperformed vis-a-vis the original expectations of the lender. In 2020, the Laotian authorities urgently sought debt relief from China Eximbank.

At that time, the gross reserves of the Bank of Laos stood at only 1.5 months of import cover and credit rating agencies warned of a high default probability.

In 2020, China Eximbank also agreed to reprofile multiple loan agreements that it had previously signed with the Government of Laos (as captured via Record ID#96464).

These debt service payment deferrals lasted for approximately 4-years (2020 and 2023) and provided approximately $1.892 billion of cash flow relief ($1.422 billion in deferred principal payments and $470 million in deferred interest payments). Deferred principal and interest repayments in 2020 were worth $202 million.

Deferred principal and interest payments were worth $426 million in 2021. Deferred principal and interest payments were worth $594 million in 2022. Deferred principal and interest payments were worth $670 million in 2023.

📋 Staff Comments

This project is also known as the Pakbeng-Ngeun Bridge Project, the China-Laos Friendship Bridge Project, the Pakbeng Along NR2 or Trans-Mekong River Bridge Project, and the Oudomxay-Sainyabuli Bridge across the Mekong River Project. The Chinese project title is 老挝北本跨湄公河“中老友谊大桥”项目 or 湄公河桥建设 or 老挝北本湄公河大桥项目 or 老挝北本跨湄公河“中老友谊大桥”项目 or 老挝北本湄公河大桥项目.
According to the World Bank's Debtor Reporting System (DRS), the weighted average maturity of all official sector lending from Chinese creditors to government and government-guaranteed borrowing institutions in Laos was 20.0281-years in 2010. AidData estimates the maturity of the China Eximbank loan that supported the Pakbeng Mekong Bridge Project by using this figure. See https://www.dropbox.com/scl/fi/uno1hf2pjg3nfz78h72c6/Private-and-Official-Sector-PRC-Borrowings-and-Borrowing-Terms-of-Lao-PDR-September-2024.xlsx?rlkey=s7eas067aykllu1lik074l5x5&dl=03. According to the World Bank's Debtor Reporting System (DRS), the weighted average grace period of all official sector lending from Chinese creditors to government and government-guaranteed borrowing institutions in Laos was 7.2533-years in 2010. AidData estimates the grace period of the China Eximbank loan that supported the Pakbeng Mekong Bridge Project by using this figure. See https://www.dropbox.com/scl/fi/uno1hf2pjg3nfz78h72c6/Private-and-Official-Sector-PRC-Borrowings-and-Borrowing-Terms-of-Lao-PDR-September-2024.xlsx?rlkey=s7eas067aykllu1lik074l5x5&dl=04. According to the World Bank's Debtor Reporting System (DRS), the weighted average interest rate of all official sector lending from Chinese creditors to government and government-guaranteed borrowing institutions in Laos was 2.0702% in 2010. AidData estimates the interest rate of the China Eximbank loan that supported the Pakbeng Mekong Bridge Project by using this figure. See https://www.dropbox.com/scl/fi/uno1hf2pjg3nfz78h72c6/Private-and-Official-Sector-PRC-Borrowings-and-Borrowing-Terms-of-Lao-PDR-September-2024.xlsx?rlkey=s7eas067aykllu1lik074l5x5&dl=0

📚 Sources & References

Bridge across the Mekong River in Laos aid project closure ceremony held
China bridges last Mekong gaps
New Mekong bridges linking China to SE Asia get green light
Remarks by H.E. Mr. Thongsing Thammavong
Prime Minister of Lao PDR at the Opening Ceremony of the 21st World Economic Forum 31 May 2012
Bangkok
Thailand
China’s Internal and External Relations and Lessons for Korea and Asia
Mekong Bridge linking Xayaboury to Oudomxay almost complete
Regional Investment Framework Pipeline of Potential Projects (2013–2022)
Development Plan of International Navigation on the Lancang-Mekong River
COUNTRY REPORT ON THE IMPLEMENTATION OF THE ALMATY PROGRAMME OF ACTION
Pakbeng Mekong River Bridge in Laos is Completed and Open to Traffic
Governing aid from China through embedded informality: Institutional response to Chinese development aid in Laos
老挝北本湄公河大桥项目
利用我优买信贷支持的老挝乌多姆塞省北本跨湄公河大桥项目开工
援老挝跨湄公河大桥项目举行合龙仪式
China's Overseas Development Finance
Chinese Financial Aid Projects
利用我优买信贷支持的老挝乌多姆塞省北本跨湄公河大桥项目开工Opening ceremony of the renovation of China-loaned Laos cross-Mekong river bridge in Udomsay Province was held
中国进出口银行行长李若谷率团访问老挝
中方援建的昆曼公路跨湄公河大桥项目进入招标程序
我优买资金支持的老挝占巴塞省东孔岛跨湄公河大桥举行竣工通车仪式
布建国大使出席老挝北本跨湄公河“中老友谊大桥”项目开工仪式 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 Laos

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