Completed Mixed AidData Chinese Aid

Bank of China contributes $260 million to $298.9 million syndicated loan for the Cañar and Naranjal Flood Control Project

$260.03M USD

Funder	Bank of China (BOC)
Recipient Organization	Government of Ecuador
Country	Ecuador
Start Date	Jul 31, 2013
End Date	Jul 11, 2026
Duration	4,728 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`38934`

Grant Description

Bank of China contribution of USD $260 million to USD $298.88 million syndicated loan for the Cañar and Naranjal Flood Control Project On August 27, 2012, Bank of China sent a strictly confidential set of indicative terms and conditions for the financing of the Cañar and Naranjal Flood Control Project.

Then, on July 31, 2013, the Republic of Ecuador signed a $298,880,591.93 syndicated loan agreement [identification number: 0033039-0000070 BJ: 1749986.10] with Bank of China Limited and Deutsche Bank (China) Co., Ltd. for the Cañar and Naranjal Flood Control Project. Bank of China Limited contributed $260,026,114.98, while Deutsche Bank (China) Co., Ltd. contributed $38,854,476.95.

📋 Loan / Grant Terms

💰 Loan Amountcarried the following borrowing terms: a variable interest rate of 6 month LIBOR plus a 3

⏳ Grace Period4 years

The borrower was responsible for making 20, equal, semiannual principal payments to the lender.

The borrower was expected to use the proceeds of the loan to partially finance two commercial contracts (no. 2012-061 and 2012-062) worth $351,624,225.80 between China International Water & Electric Corporation and Secretaria Nacional del Agua (Senagua), which were signed on August 8, 2012 and August 9, 2012.

The loan’s (principal) outstanding amount was $179,328,355.13 as of December 31, 2021 and $149,440,295.93 as of November 30, 2022.

The purpose of the Cañar and Naranjal Flood Control Project was to set fluvial defenses along the Cañar river, and thereby protect some 37,000 hectares and 176 km along the river and its effluents, as well as Patul, Piedras, Norcay rivers and the Trobador streams.

With a total of 10 gates, the project sought to regulate up to 1,500 m3/s of water coming from the overflows of the river, to a 23 km long bypass which will have a deposit in La Lagartera lakes, which was designed to store 14 million cubic meters of water for irrigation. The project was carried out by China International Water & Electric Corporation (CWE).

It was originally scheduled to commence on August 9, 2012 and reach completion by August 2015. However, the $393.8 million contract with CWE did not become effective until 2015. Construction began on April 21, 2015.

Project activities included the construction of a diversion dam; the construction of a 23 km long canal; the construction of 2 bridges; and the rehabilitation of 4 bridges.

The project fed river water to eight giant Chinese turbines designed to produce enough electricity to power more than a third of Ecuador. The project was completed and handed over to the authorities on January 12, 2016.

📋 Staff Comments

The Chinese project title is ‘厄瓜多尔可尼尔防洪工程项目是公司在厄’ or '可尼尔防洪项目' . The Spanish project title is Construcción del Sistema de Control de Inundaciones Naranjal and Construcción del Sistema de Control de Inundaciones Cañar.
For loan and debt rescheduling records with variable interest rates, AidData calculates the all-in interest rate at T0 based on the reference rate (such as LIBOR or EURIBOR) on the loan start date, plus any known margin. Please see the methodology for additional details.
The Ecuadorian Ministry of Finance loan identification number is 28082000.
The loan agreement can be accessed in its entirety via https://www.dropbox.com/scl/fi/kahw7f6srj1sns3j2cohv/Ecuador-2013-Bank-of-China-and-Deutsche-Bank-Syndicated-Loan-Agreement-the-Ca-ar-and-Naranjal-Flood-Control-Project.pdf?rlkey=0hbydvuz2ujujydod5mp14zal&dl=05. July 12, 2013 correspondence between Sinosure and the Ecuadorian Ministry of Finance (re: the insurance premium) can be accessed via https://www.dropbox.com/scl/fi/no1owd2oi9eqdc7z827ia/ANEXO-11-Carta-Sinosure-ofrece-bajar-prima.pdf?rlkey=ciqju1ez5xpta61x7w007hkxn&dl=06. An ex ante (expected) amortization table from Ecuador's Ministry of Finance can be accessed on pg. 16 of https://www.dropbox.com/scl/fi/qbdk5dfbdy8nh06h42tk3/ANEXO-6-MEMORANDO-No.-MF-SFP-2013-142.-Recomendaci-n-seguir-tr-mite-endeudamiento.pdf?rlkey=p25w45n3euaq2cgb4q3mb1yqx&dl=07. The strictly confidential set of indicative terms and conditions that Bank of China sent to Ecuador's Ministry of Finance on August 27, 2012, can be accessed via https://www.dropbox.com/scl/fi/g9ukk9qxk6llv5h90dvah/ANEXO-5-Bank-of-China-Sinosure-condiciones.pdf?rlkey=8sqmilzg33qjt31dmzbqso02e&dl=0

📚 Sources & References

7 Acta-No 16. Comit‚ de deuda aprob¢ convenio de cr‚dito
A Line in the Equatorial Forests: Chinese Investment and the Environmental and Social Impacts of Extractive Industries in Ecuador
ANEXO 11 Carta-Sinosure-ofrece-bajar-prima
ANEXO 12 Oficio No. 13818-Procuraduria-autoriza-arbitraje-Londres
ANEXO 4 Oficio No. MF-SFP-2012-0692. Peticiขn de reuniขn con China
ANEXO 5 Bank of China-Sinosure-condiciones
Base-de-Datos-Boletin-de-Deuda-Noviembre-2022
Canar Flood Control Project
Carta-bonos-global.
China and Latin America: What’s Happening?
China, the Politic and Economic Strategic Partner of Ecuador in the Era of the Socialism of the Twenty - first Century
China’s Global Ambitions
Cash and Strings Attached
Control de Inundaciones Cañar beneficiará a las provincias de Guayas y Cañar
Cuaderno-Estadístico-Agosto-2022
Cuaderno-Estadístico-Boletín
Ecuador 2013 Bank of China and Deutsche Bank Syndicated Loan Agreement the Cañar and Naranjal Flood Control Project
Ecuador built 70% of its infrastructure for floods control and irrigation in the last years
Ecuadorian Minister of Transport and Public Works inspects Cañar Flood Control Project
Ecuadorian President inspects Canar Project
Estadísticas Deuda Pública
Estudio de Impacto y Plan de Manejo Ambiental del Control de Inundaciones Sistema Hídrico Cañar
Facility Agreement
Hogan Lovells Advises PDVSA on US$1 Billion Financing Deal with Russian Bank
January 2016- External and Internal Credit Contracts
July 2016 Internal and External Credit Contracts
Línea de Tiempo
MEMORANDO No. MF-CGJ-2013-126
MEMORANDO No. MF-SFP-2013-142
Oficio No SE-DM-13
OFICIO No. SENPLADES-SZ5M-2012-0380
Oficio N§ SENAGUA-SN.1-2012-0498-O
PROYECTO 'CONTROL DE INUNDACIONES CAÑAR'
Proyectos de control de inundaciones Naranjal y Cañar se inauguran hoy
Senagua watch: Cañar
Naranjal project supervision
Bulubulu expropriations
Sistema Control de Inundaciones Cañar beneficiará a 105.239 habitantes
中企承建拉美最大防洪工程竣工
中国银行与德意志银行为厄瓜多尔水利项目提供2.98亿美元融资
厄瓜多尔《宇宙报》报道可尼尔防洪工程项目竣工典礼
厄瓜多尔总统出席中资企业承建防洪工程竣工仪式-甘肃旅游经济网
厄瓜多尔总统出席可尼尔防洪工程PBC1桥通车仪式
打造拉美最大防洪工程（记者观察） 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.