Completed Development AidData Chinese Aid

China Eximbank provides $16.7 million concessional loan for Lao Airlines Hangar and Maintenance Training Center Project

$16.7M USD

Funder	Export-Import Bank of China (China Eximbank)
Recipient Organization	Government of Laos
Country	Lao People's Democratic Republic
Start Date	Jan 01, 2010
End Date	Feb 18, 2032
Duration	8,083 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`35759`

Grant Description

China Eximbank provides $16.7 million concessional loan for Lao Airlines Hangar and Maintenance Training Center Project In 2010, China Eximbank and the Government of Laos signed a $16.7 million concessional loan agreement for the Lao Airlines Hangar and Maintenance Training Center Project.

📋 Loan / Grant Terms

📅 Maturity20.0281 years

⏳ Grace Period7.2533 years

💹 Interest Rate2.0702%

The project involved the construction of a hangar and maintenance training center at Wattay International Airport, which is located 3 km outside the city of Vientiane. The project covered an area of 36,400 square meters with a total construction area of about 15,000 square meters.

It included the construction of a maintenance hangar, a training center, corridors, a parking lot, outdoor facilities, and landscaping.

The project was designed to promote the development of aviation industries in Laos, and provide a solid foundation for its route expansion in developed countries.

Xi’an Aircraft Industry (Group) Company Ltd. and Yunnan Construction Engineering Group Co., Ltd. were the contractors responsible for implementation. The project commenced on November 15, 2010 and then a formal groundbreaking ceremony took place on January 20, 2011. Project implementation ended on March 15, 2012.

However, a project completion ceremony was not held until June 21, 2016.

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 Lao Airlines State Enterprise (LASE) Hangar and Maintenance Training Center Project. The Chinese project title is 航机库及维修培训中心项目.
The China Eximbank loan that supported this project is not included in the Overseas Development Finance Dataset that Boston University’s Global Development Policy Center published in December 2020.
The precise loan commitment year is unknown. For the time being, AidData has coded it as the first year of project implementation (2010).
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 Lao Airlines Hangar and Maintenance Training Center 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=05. 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 Lao Airlines Hangar and Maintenance Training Center 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=06. 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 Lao Airlines Hangar and Maintenance Training Center Projectby 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

Lao Airlines hangar use and maintenance training center project
I have excellent loan to implement the completion ceremony held
New facilities to boost Lao Airlines standards
China to Help Laos Become E-Government
驻老挝大使布建国出席老航机库及维修培训中心项目开工奠基仪式
老挝航空机库与维修培训中心工程开工
China's Overseas Development Finance
Lao Airlines's new hangar under construction
驻老挝大使布建国出席老航机库及维修培训中心项目开工奠基仪式
President Li Ruogu of the Export-Import Bank of China went to our Lao Airlines hangar and maintenance training center project to inspect and guide the work
布建国大使出席老挝航空机库及维修培训中心项目竣工移交仪式
东南亚: 中国在老挝的重大投资项目清单（2018年更新） 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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