Completed Mixed AidData Chinese Aid

China Eximbank provides $208 million preferential buyer’s credit for Southern Power Grid Reconstruction Project (Linked to Record ID#39619, #96098)

$208M USD

Funder	Export-Import Bank of China (China Eximbank)
Recipient Organization	Ministry of Finance of the Kyrgyz Republic
Country	Kyrgyz Republic
Start Date	Jun 02, 2011
End Date	Jan 08, 2031
Duration	7,160 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`40431`

Grant Description

China Eximbank provides $208 million preferential buyer’s credit for Southern Power Grid Reconstruction Project On June 2, 2011, China Eximbank and the Ministry of Finance of the Kyrgyz Republic signed a $208 million preferential buyer’s credit (PBC) agreement [CHINA EXIMBANK PBC No. (2011)18 TOTAL NO. (169)] for the Southern Power Grid Reconstruction Project.

The Kyrgyz Parliament ratified the loan (PBC) agreement on June 13, 2011.

📋 Loan / Grant Terms

💰 Loan Amountcarried the following borrowing terms: a 20 year maturity

📅 Maturity20 years

⏳ Grace Period7 years

💹 Interest Rate2%

The final maturity date of the loan is September 21, 2031.

On August 3, 2011, the State Agency for Budget Credit Management under the Ministry of Finance of the Government of the Kyrgyz Republic entered into a subsidiary loan agreement (on-lending arrangement) with National Electric Grid of Kyrgyzstan, OJSC (or Joint Stock Company “National Grid of Kyrgyzstan” or OJSC Natsionalnaya Elektricheskaya set Kyrgyzstana or OJSC NES of Kyrgyzstan or NEGK).

The proceeds of the loan were to be used by the end-user (ultimate borrower) — National Electric Grid of Kyrgyzstan, OJSC — to finance 100% of the cost of its $208 million commercial contract (ID#166-69/0093) with Tebian Electric Apparatus Stock Co., Ltd. (TBEA), which was signed on October 15, 2009.

According to the Government of the Kyrgyz Republic’s Aid Management Platform (AMP), the first loan disbursement (of $41,200,000) took place on December 21, 2011; the second loan disbursement (of $130,881,100) took place on December 31, 2012; the third loan disbursement (of $25,276,200) took place on December 31, 2013; and the fourth loan disbursement (of $183,030.90) took place on June 1, 2015.

The same source notes that, as of 2015, the loan disbursement rate was 94.9% (with total loan disbursements amounting to $197,540,330.90).

According to internal data that the Kyrgyz Ministry of Finance shared with AidData in July 2022, the loan had achieved a disbursement rate of 100% as of December 31, 2021 and its amount outstanding was $161,617,074.71 as of December 31, 2021.

The Southern Power Grid Reconstruction Project involved the construction of a 500 kV Datka power station in Jalal-Abad (see Record ID#39619) and the construction of 220 kV power transmission lines in Batken, Jalal-Abad, and Osh stretching for 256.5 km. TBEA was the contractor responsible for project implementation.

On August 30, 2011, construction commenced. The project was completed on June 20, 2013.

However, the Southern Power Grid Reconstruction Project has underperformed from a revenue generation and debt repayment perspective.

On December 9, 2019, a Settlement Agreement was signed by Joint Stock Company “National Grid of Kyrgyzstan” and the State Agency for Budget Credit Management under the Ministry of Finance of the Kyrgyz Republic.

Under the terms of the Settlement Agreement, overdue repayments (arrears) were included in an updated repayment schedule (amortization table) without any change to the loan’s final maturity date.

According to the audited financial statement of Joint Stock Company “National Grid of Kyrgyzstan” for the year that ended on December 31, 2019, ‘[t]his restructuring […] led to significant changes in the amortized cost of loans from the Export-Import Bank of China.’ Then, on or around July 1, 2021, China Eximbank and the Government of the Kyrgyz Republic signed a debt suspension agreement [No.

DSSI2021PHASE2-029].

Under the terms of the agreement (captured via Record ID#96102), the lender agreed to suspend principal and interest payments due between July 1, 2021 and December 31, 2021 under the preferential buyer's credit agreement for the Southern Power Grid Reconstruction Project. The original loan (PBC) that was issued on June 2, 2011 is captured via Record ID#40431.

The December 2019 rescheduling is captured via Record ID#96098. The July 2021 rescheduling is captured via Record ID#96102.

📋 Staff Comments

The Russian project title is проекта модернизации линий электропередачи на юге Кыргызстана. The Chinese project title is 南方电网改造项目.
The China Eximbank PBC (loan) agreement can be accessed in its entirety via https://www.dropbox.com/s/gazngit9wodhyby/China%20Eximbank%20PBC%20Agreement%20for%20the%20Southern%20Power%20Grid%20Reconstruction%20Project.doc?dl=0.
The 2021 debt suspension agreement [No. DSSI2021PHASE2-028] can be accessed in its entirety via https://www.dropbox.com/s/huwa695j3w9hwig/DSSI%20Agreement%20for%20Kyrgyz%20Republic.pdf?dl=0.
A detailed loan repayment reschedule (that the Kyrgyz Ministry of Finance shared with AidData in July 2022) can be accessed via https://www.dropbox.com/s/xg0cmomv0qk7cbj/Repayments.xlsx?dl=0. The schedule reflects actual repayments through December 31, 2021 and planned/scheduled repayments after December 31, 2021. Note also that (a) China Eximbank granted the Government of Kyrgyz Republic a a deferral of payments for the period from August 2021 to December 2021, and (b) the deferred principal and interest amounts are included in the main body of the debt and the repayment amounts of the deferrals (with additional accrued interest for granting a deferment) are already included in the repayment schedule.
More detailed locational information can be found within the source Проект «Модернизация линий электропередачи на юге Кыргызстана».
The Southern Power Grid Reconstruction Project is closely related to another China Eximbank-financed Datka-Kemin 500kv Transmission Line Construction Project (captured via Project ID#39619), which supported the construction of the 88 km, 500kv power transmission line from Datka to Kemin.

📚 Sources & References

1 П роект «Модернизация линий электропередачи на юге Кыргызстана», АУДИТОРСКАЯ КОМПАНИЯ АУДИТ ГРУПП О АО «НАЦИОНАЛЬНАЯ ЭЛЕ КТРИЧЕСКАЯ СЕТЬ КЫРГ ЫЗСТАНА» ФИНАНСОВАЯ ОТЧЕТНОСТЬ, ЗА ПЕРИОД, ЗАКАНЧИВАЮЩИЙСЯ 31 ДЕКАБРЯ 20 1 2 ГОД А
AMP Kyrgyz Republic Record ID 8718835131.pdf
China improving Kyrgyz electrical grid
China to help Kyrgyzstan to gain electricity independence from Uzbekistan
China to help Kyrgyzstan upgrade power grids
China's Foreign Assistance PPT Presentation
DSSI Agreement for the Kyrgyz Republic
IMF Staff Country Reports
Kyrgyz Republic
Kyrgyz Republic AMP
Kyrgyz Republic High Level Development Conference (2013)
Kyrgyzstan and the Belt and Road Initiative
Kyrgyzstan
China sign $208 mln loan agreement for construction of power transmission line in southern Kyrgyzstan
National Electric Grid of Kyrgyzstan OJSC - Financial Statements for the year ended 31 December 2019 with independent auditor's report
On ratification of the Loan Agreement - a soft loan for the implementation of the project for the modernization of power lines in the south of Kyrgyzstan
On the implementation of the project for the modernization of power transmission lines in the south of Kyrgyzstan
Original Loan Agreement
Project Administration Manual:Kyrgyz Republic: Toktogul Rehabilitation Phase 2 Project
Project for the modernization of power lines in the south of Kyrgyzstan
Re: Project-Specific Informa5on from the Kyrgyz Aid Management Pla?orm (Кыргызстандагы жардамдарды башкаруу платформасынан Долбоор боюнча Конкреттүү маалымат)
Rehabilitation of Bishkek-Naryn-Torugart Road, table, table, table, table
The Chinese Constitution of Central Asia, «Строительство линии электропередачи 500 кВ «Датка-Кемин» и подстанции 500 кВ «Кемин», «Строительство линии электропередачи 500 кВ «Датка-Кемин» и подстанции 500 кВ «Кемин», Кыргызстан завершает строительство линий электропередачи на юге, ОТЧЕТ Об аудите деятельности и целевого использования кредитных средств в Открытом акционерном обществе «Национальная электрическая сеть Кыргызстана» за 2013 год, ПРАВИТЕЛЬСТВО КЫРГЫЗСКОЙ РЕСПУБЛИКИ ПОСТАНОВЛЕНИЕ
特变电工建设的“南部电网改造项目”竣工，吉总统对中方提供贷款建设该项目表示感谢
特变电工承建“南方电网改造项目”竣工仪式举行
齐大愚大使与吉总统共同出席中国援建电网改造项目竣工仪式 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

Ministry of Finance of the Kyrgyz Republic

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