Completed Development AidData Chinese Aid

China Eximbank provides RMB 700 million government concessional loan for Baoré Cement Factory Project (Linked to Record ID#396)

¥700K RMB

Funder	Export-Import Bank of China (China Eximbank)
Recipient Organization	Government of Chad
Country	Chad
Start Date	Jul 01, 2007
End Date	Aug 03, 2031
Duration	8,799 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`397`

Grant Description

China Eximbank provides RMB 700 million government concessional loan for Baoré Cement Factory Project On September 14, 2006, the Government of Chad and China CAMC Engineering Co, Ltd signed a memorandum of understanding regarding the construction of a turnkey cement plant in Baoaré (Mayo Dallah Department).

Then, in July 2007, China Eximbank and the Government of Chad signed an RMB 700 million ($92,029,990.50) government concessional loan (GCL) agreement for the Baoré Cement Factory Project.

📋 Loan / Grant Terms

💰 Loan Amountcarried a 1

📅 Maturity13 years

⏳ Grace Period5 years

💹 Interest Rate1.5%

The proceeds of the GCL were on-lent to Société National de Ciment Tchad (SONACIM Tchad), a Chadian state-owned company that was established to manage the Baoré Cement Factory.

The ultimate borrower (SONACIM Tchad) the use the proceeds of the GCL to finance a $87,784,200 commercial contract with China CAMC Engineering Co, Ltd, which was signed on January 30, 2007.

The Baoré Cement Factory Project involved the construction of a cement plant with annual production capacity of 200,000 tons as well as a dedicated heavy fuel oil (HFO) power station, mining equipment and access roads.

The plant occupies an area of 17 hectares and it is located in the village of Bissi Kéda within Mayo Kebbi West State (approximately 8km from the limestone quarries in Baoaré).

To control the quality of the cement that is produced, a modern laboratory adjoins the factory; it is used to analyze samples taken at random to verify their compliance with international standards.

Beijing Triumph Materials Engineering Design Co. was the contractor responsible for project design and China CAMC Engineering Co, Ltd. was the contractor responsible for implementation.

The project commenced on December 17, 2007 and was originally scheduled to reach completion within 30 months (June 17, 2010). The factory was officially completed and put into production on February 16, 2012.

Chad's President Idriss Deby, Prime Minister Emmanuel Nadingar, and Chinese Ambassador Yang Guangyu attended the opening ceremony for the factory. The region where the cement plant is located has three quarries with 7 million tonnes of limestone. It also abounds in clay, laterite and sand, three raw materials that go into the manufacture of cement.

The cement plant reportedly employs 300 Chadian workers and 100 Chinese workers.

There are indications that the China Eximbank loan for the Baoré Cement Factory Project financially underperformed vis-a-vis the original expectations of the lender.

📋 Loan / Grant Terms

💰 Loan Amountfor the Baoré Cement Factory Project

A rescheduling agreement was finalized in April 2017: China Eximbank agreed to the lengthen the maturity of the loan and reschedule arrears that had accumulated (as captured via Record ID#55744).

It appears that China Eximbank did not require the accumulated arrears to be repaid before rescheduling the maturity of the loan.

Then, on or around June 16, 2020, Baoré Cement Factory suspended its production activities due to a combination of factors, including (a) technical defects at the factory's production facilities, (b) difficulty retaining technicians to operate and maintain the factory, and (c) excessive debt accumulation by SONACIM Tchad between 2012 and 2020.

It relaunched its productivities on December 5, 2020.

📋 Staff Comments

The project is referred to as Baoare Cement Factory Project or Bahoré Cement Factory Project. The Chinese project title is 巴阿赫水泥厂 or 乍得巴阿赫水泥厂项目 or 乍得巴阿赫水泥厂项目.
In the database of Chinese loan commitments that SAIS-CARI released in July 2020, it identifies the interest rate of the China Eximbank loan as LIBOR plus a 1.5% margin. However, most other sources refer to the interest rate of the government concessional loan (GCL) that supported this project as 1.5%. AidData relies on the 1.5% estimate since China Eximbank is not known to have ever issued a GCL at a floating market interest rate (such as LIBOR).
On October 11, 2011, the Government of Chad established a state-owned company — called Société National de Ciment Tchad (SONACIM Tchad) — to manage the Baoré Cement Factory.
Some sources identify the monetary value of the commercial contract as $92,332,200. See https://ndjamenahebdo.net/droit-de-reponse/5. Between January 2012 and June 2020, SONACIM TChad reported accumulated debts worth CFA 25 billion (including CFA 8 billion to banks, CFA 4 billion to suppliers, CFA 3 billion in unpaid taxes and social security expenses, CFA 300 million in unpaid auditing and legal fees, and CFA 325 million in unpaid judicial penalties). See https://ndjamenahebdo.net/sonacim-lexemple-type-de-mauvaise-gestion/

📚 Sources & References

http://www.sinomach.com.cn/templates/T_news_en/content.aspx?nodeid=161&page=ContentPage&contentid=10207, http://www.camce.com.cn/en/news/gsxw/1299582423-426.html, http://www.ccement.com/news/Content/50083.html, http://global.factiva.com/aa/?ref=XNEWS00020120217e82h006hf&pp=1&fcpil=en&napc=S&sa_from=
China’s Growing Involvement in Chad: Escaping Enclosure?
CEMENT PLANT IN BAOARE
CHAD
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Tchad: démarrage des travaux de bitumage d'une route de 286 km sur financement chinois
Tchad: inauguration d'une cimenterie construite par la Chine
Le marché du ciment au Tchad : pourquoi le prix est-il si élevé ?, Étude sur les Ressources minières et pétrolières dans le Mayo Kebbi Ouest Tchad
Inscrire un nouveau chapitre dans les annales de l'amitié et de la coopération sino-tchadiennes Li Yuanchao
Vice-Président de la République populaire de Chine
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中国驻乍得大使视察中工国际承建的乍得巴阿赫水泥厂
乍得《进步报》特刊报道中工国际乍得巴阿赫水泥厂项目
乍得巴阿赫水泥厂项目
Bientôt du ciment fabriqué au Tchad
De nouvelles formes spatiales chinoises en Afrique
Chad and China sign $257 million economic package deal
REPUBLIQUE DU TCHAD
Tchad : les autorités décdent de rendre le ciment abordable à la population
DRS Official Commitments from China through 2020
SONACIM
MINISTERE DES FINANCES ET DU BUDGET DIRECTION GENERALE DU TRESOR ET DE LA COMPTABILITE PUBLIQUE
RAPPORT DE SYNTHESE DES TRAVAUX DE L ‘ATELIER DE LANCEMENT DE L’INITIATIVE DE TRANSPARENCE DES INDUSTIRES EXTRACTIVES ( ITIE ) N’DJAMENA ( CEFOD ) LES 24 ET 25 AOUT 2007 RAPPORT DE SYNTHÈSE DES TR LANCEMENT DE L’INITIATIVE DE TRANSPARENCE DES INDUSTRIES EXTRACTIVES (ITIE) AU TCHAD
Societe anonyme au capital de 500,000,000 francs CFA
Droit de réponse
RAPPORT DE GESTION DE LA DETTE PUBLIQUE 2021, https://www.imf.org/en/Publications/CR/Issues/2017/08/04/Chad-Request-for-a-Three-Year-Arrangement-Under-the-Extended-Credit-Facility-and-45164 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.