Completed Mixed AidData Chinese Aid

China Eximbank provides $200 million buyer’s credit loan for Naypyidaw International Airport Construction Project (Linked to Record ID#96221, 98029)

$200M USD

Funder	Export-Import Bank of China (China Eximbank)
Recipient Organization	Myanmar Foreign Trade Bank (MFTB)
Country	Myanmar
Start Date	Jan 27, 2011
End Date	Jul 16, 2031
Duration	7,475 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`46986`

Grant Description

China Eximbank provides $200 million buyer’s credit loan for Naypyidaw International Airport Construction Project On January 27, 2011, China Eximbank and Myanmar Foreign Trade Bank (MFTB) signed a $200 million buyer’s credit loan (BCL) agreement for the Naypyidaw International Airport Construction Project.

The borrowing terms of the BCL are unknown.

However, it is known that the borrower was to use the proceeds from the BCL to finance two EPC contracts: $94.8 million EPC contract that was signed by China Machinery Engineering Corporation (CMEC) and Myanmar's Ministry of Transport in May 2010, and a $117 million EPC contract that was signed by China Harbour Engineering Company (CHEC) and Myanmar's Ministry of Transport on December 15, 2010.

The purpose of the project was to construct an international airport in the city of Naypyidaw with the capacity to handle 3.5 million passengers a year.

More specifically, it involved the construction and installation of a Passenger Terminal Building, Apron & Remote Parking, Runway, Taxiway, Bridges, Departure Control System, Terminal Electrical System, Control Tower, Firefighting System and a Ground Handling System. The project was implemented in two ‘lots’ and each lot was supported by a separate EPC contract.

The project commenced on January 26, 2011 and it was officially completed when the airport was inaugurated on December 19, 2011. A final acceptance certificate (FAC) was issued by the project owner in 2013. The project’s originally anticipated end date was July 2014.

There are some indications that the China Eximbank loan for the Naypyidaw International Airport Construction Project may have financially underperformed vis-a-vis the original expectations of the lender.

In 2020, China Eximbank and the Government of Myanmar signed a debt suspension agreement as part of the G-20 Debt Service Suspension Initiative (DSSI).

Under the terms of the agreement, the lender agreed to suspend principal and interest payments due between May 1, 2020 and December 31, 2020 under 3 buyer’s credit loan (BCL) agreements, 6 government concessional loan (GCL) agreements, and 27 preferential buyer’s credit (PBC) agreements (as captured via Record ID#98029).

Debt service payments under many of these loan agreements were again deferred in 2021 (as captured via Record ID#96221).

📋 Staff Comments

This project is also known as the Naypyidaw International Airport Project, the Naypyidaw International Airport Project II, the Nay Pyi Taw International Airport Reconstruction Project, the Naypyidaw International Airport Expansion Project, and the Nay Pyi Taw International Airport Construction Project. The Chinese project title is 奈比多國際機場 or 缅甸内比都国际机场项目. The Burmese project title is နေပြည်တော် အပြည်ပြည်ဆိုင်ရာ လေဆိပ် or ေနျပည္ေတာ္အျပည္ျပည္ဆုိင္ရာေလဆိပ္.
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.
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 Myanmar was 15.0477-years in 2011. AidData estimates the maturity of the China Eximbank loan that supported the Naypyidaw International Airport Construction Project by using this figure. See https://www.dropbox.com/s/949n5rctiue6d7c/IDS_Average_grace_period_and_maturity_on_new_external_debt_commitments.xlsx?dl=0 4. 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 Myanmar was 5.7977-years in 2011. AidData estimates the grace period of the China Eximbank loan that supported the Naypyidaw International Airport Construction Project by using this figure. See https://www.dropbox.com/s/949n5rctiue6d7c/IDS_Average_grace_period_and_maturity_on_new_external_debt_commitments.xlsx?dl=0 5. 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 Myanmar was 4.6293% in 2011. AidData estimates the interest rate of the China Eximbank loan that supported the Naypyidaw International Airport Construction Project by using this figure. See https://www.dropbox.com/s/ab8qt4n6jijcbhd/IDS_Average%20interest%20on%20new%20external%20debt%20commitments.xlsx?dl=0

📚 Sources & References

Airport Just Latest Chinese Foray into Burma's Transport Sector
China's uphill battle to invest in Myanmar
Sino-Myanmar Relations And Its Impact On The Region
OPENING CEREMONY W AS HELD FOR NA YPYIDA W INTERNA TIONAL AIRPOR T OF BURMA
YANGON INTERNATIONAL AIRPORT
Air Asia set for first international landing at NPT airport
China's Role in Burma's Development
Senior General Than Shwe receives Standing Committee member of Political Bureau of Central Committee of the Communist Party of China
Modern China-Myanmar Relations Dilemma of Mutual Dependence
中交集团与缅甸交通部民航局签署内比都机场项目
中港公司新签缅甸内比都机场项目
Over $ 3 billion and nearly 2 billion yuan in loans from China in four years
Disclosure of 20 Chinese loans from 2006-2011 by Ministry of National Planning and Economic
Nay Pyi Taw International Airport
The New Light of Myanmar
Myanmar
China sign agreements on bank loans
China Machinery Engineering Corporation Global Offering
ANNUAL RESULTS ANNOUNCEMENT FOR THE YEAR ENDED DECEMBER 31, 2013
Civil Engineering
International Airport project in Myanmar
Municipal engineering, housing construction and other industrial engineering
Nay Pyi Taw International Airport in Myanmar opened to
缅甸内比都国际机场举行通航仪式
中港公司新签缅甸内比都机场项目
There is no airline to land at Nay Pyi Taw Airport worth more than $ 200 million
ASIA WORLD HAS NOT BEEN ABLE TO REPAY THE LOAN AGREEMENT FOR THE CONSTRUCTION OF FOUR PORTS IN NAY PYI TAW
The government will accept the return of Asia World Company from Nay Pyi Taw Airport due to loss and will pay off all of Asia World's debts
Myanmar Breaking News
China Overseas Development Finance 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.