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China Eximbank provides $325 million preferential buyer’s credit for Shahjalal Fertilizer Factory Project (Linked to Record ID#34230)
| Funder | Export-Import Bank of China (China Eximbank) |
|---|---|
| Recipient Organization | Bangladesh Chemical Industries Corporation (BCIC) |
| Country | Bangladesh |
| Start Date | Jan 21, 2012 |
| End Date | Apr 28, 2027 |
| Duration | 5,576 days |
| Number of Grantees | 1 |
| Roles | Recipient |
| Data Source | AidData Chinese Aid |
| Grant ID | 38969 |
Grant Description
China Eximbank provides $325 million preferential buyer’s credit for Shahjalal Fertilizer Factory Project On January 21, 2012, China Eximbank and the Government of Bangladesh signed an RMB 1.6 billion government concessional loan (GCL) agreement and a $325 million preferential buyer’s credit (PBC) agreement for the construction of the Shahjalal fertilizer factory near Fenchugonj Upazila (within the Sylhet District and the Division of Sylhett).
The PBC is backed a Sinosure credit insurance policy. Record ID#34230 captures the GCL, while Record ID#38969 captures the PBC.
According to the Government of Bangladesh’s Economic Relations Division (ERD), the GCL had disbursed RMB 1,269,698,000 as of June 30, 2014 and RMB 1.6 billion as of June 30, 2018 and the PBC had achieved a 100% disbursement rate ($325 million out of $325 million) as of June 30, 2021.
According to the Government of Bangladesh’s ERD, the borrower had made repayments under the GCL worth RMB 106,670,000 as of June 30, 2018, RMB 320,000,000 as of June 30, 2020, and RMB 426,667,000 as of June 30, 2021, and it had made repayments under the PBC worth $86.667 million as of June 30, 2021.
The purpose of this project was to set up a new urea fertilizer factory with a production capacity of 1760 metric tons per day (or 5,80,800 metric tons per year) of granular urea at the premises of Natural Gas Fertilizer Factory Limited (NGFFL) in Fenchugonj Upazila within Sylhet District and the Division of Sylhett.
China National Complete Plant Import and Export Corporation Ltd was the EPC contractor for this project. Its work was overseen by the state-owned Bangladesh Chemical Industries Corporation. China Chengda Engineering Company Ltd. was also involved in project implementation. A foundation stone laying ceremony took place on March 24, 2012.
Construction began on or around the same date. The plant was handed over on February 29, 2016. Its originally expected completion date was June 15, 2015. The factory began commercial production on March 1, 2016.
In May 2017, the Comptroller and Auditor General of Bangladesh conducted an audit of the Shahjalal fertilizer factory's FY 2015-2016 (July 2015-June 2016) financial statements and found TK 1.098 billion in financial irregularities.
Some of these irregularities include the Bangladesh Chemical Industries Corporation (BCIC) opening two accounts of fixed-deposit receipt (FDR) in a commercial bank with Tk 20 million taken out from the project allocations which did not show the profits and interest on the funds to the exchequer, purchase of office furniture in the fiscal year although there was no provision in its development project proposal (DPP), selected contractors were paid bills without deducting VAT and income tax from them, BCIC paid inflated bills beyond the contract price for land-development and upgradation works, and more.
An independent auditor report from March 25, 2019 found no irregularities in the BCIC financial statements and documents provided.
Staff Comments
- The Government of Bangladesh's loan identification number for the China Eximbank GCL is L1120120121a. The Government of Bangladesh's loan identification number for the China Eximbank PBC is B1120120121a.
- In the document from the Shahjalal Fertilizer Company Limited (SFCL) website, the public assistance is listed as USD 560 million from China or 39,860,800,000 Taka. Therefore, the exchange rate used was 1 USD = 71.18 Taka. Using this exchange rate, the funding listed from the Government of Bangladesh in the document (8,883,672,000 Taka) would equal about USD 124.8 million.
- The Chinese project title is 孟加拉沙迦拉化肥厂 or 孟加拉国沙迦拉化肥厂项目.
Sources & References
- China interested to finance five large projects
- China to finance Fenchuganj fertiliser factory
- Shahjalal Fertiliser Factory goes into operation by June
- China offers Bangladesh $560mn to build urea plant
- China-funded urea fertiliser factory in Sylhet soon
- Bangladesh gets boost from China investment
- Biggest fertiliser factory to be ready this year
- Transparent deal for urea factory: JS body
- Chinese help sought to set up urea plant in Sylhet despite severe gas shortage, photo 2, photo 1
- Bangladesh Shahjalal Fertilizer Project Lays Foundation
- Bangladesh awards Chinese firm with fertilizer factory project
- Bangladesh awards Chinese firm with fertilizer factory project
- ECNEC approves Tk 5,409 crore fertilizer project
- 孟加拉国工业部部长视察沙迦拉化肥厂项目现场
- 孟加拉沙迦拉化肥厂项目正式签约
- Commitment and Disbursement of Grants
- Shahjalal Fertilizer Company Limited (SFCL) At a Glance
- Tk 39.87b Chinese loan for Shahjalal Fertilizer Factory
- Government Concessional Loan Preferential Buyer's Credit Brochure
- Shahjalal Fertilizer Company Limited Brochure
- Chairman Zou Baozhong participated the Foundation Stone Laying Ceremony of Shahjalal Fertilizer Plant
- Bangladesh Shahjalal Fertilizer Plant Project held its Mechanical Completion Ceremony
- Corporate Social Responsibility Repor 2016t
- COMMITMENT
- DISBURSEMENT AND REPAYMENT OF EXTERNAL (ODA) LOANS (ACTIVE)
- Bangladesh Sharjah chemical fertilizer plant project
- COMMITMENT
- DISBURSEMENT AND REPAYMENT OF SUPPLIERS'/BYERS CREDIT (ACTIVE)
- Minister of Finance and Minister of Industries of Government of Bangladesh Inspected Site of Bangladesh Shahjalal Urea Fertilizer Project Under the Implementation of COMPLANT Ltd.
- President Xi Jinping unveiled the Sharjah fertilizer plant for Bangladesh
- Government Concessional Loan & Preferential Buyer’s Credit Brochure
- COMMITMENT
- DISBURSEMENT AND REPAYMENT OF SUPPLIERS'/BYERS CREDIT (ACTIVE)
- Jointly Building Belt and Road towards SDGs - Bangladesh
- COMMITMENT
- DISBURSEMENT AND REPAYMENT OF EXTERNAL (ODA) LOANS (ACTIVE)
- COMMITMENT
- DISBURSEMENT AND REPAYMENT OF EXTERNAL (ODA) LOANS (ACTIVE)
- China's Overseas Development Finance
- 助力企业“走出去”
- Credit Management
- Audit finds financial irregularities in Shahjalal fertilizer-factory project
- Regarding the financial year 2015-2016 of 'Shahjalal Fertilizer Factory Project' under Ministry of Industries
- Independent Auditors' Report 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
Bangladesh Chemical Industries Corporation (BCIC)
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