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China Eximbank provides $262.2 million preferential buyer's credit for Phase III of Ethiopia-Hunan Industrial Park Project
| Funder | Export-Import Bank of China (China Eximbank) |
|---|---|
| Recipient Organization | Ethiopia Ministry of Finance and Economic Development |
| Country | Ethiopia |
| Start Date | May 19, 2017 |
| End Date | May 29, 2032 |
| Duration | 5,489 days |
| Number of Grantees | 1 |
| Roles | Recipient |
| Data Source | AidData Chinese Aid |
| Grant ID | 48767 |
Grant Description
China Eximbank provides $262.2 million preferential buyer's credit for Phase III of Ethiopia-Hunan Industrial Park Project On May 19, 2017, China Eximbank and the Government of Ethiopia's Ministry of Finance and Economic Development (MOFED) signed a $262,259,027.38 (ETB 6,034,721,687) preferential buyer credit (PBC) agreement [CHINA EXIMBANK PBC.
No. (2017) 16 TOTAL No.(442)] for Phase III of the Ethiopia-Hunan Industrial Park Project. On July 5, 2017, the Ethiopian House of Representatives ratified the PBC under Proclamation No.1045/2017. The proclamation went into effect on August 3, 2017.
The loan's first and last scheduled principal payment dates were January 21, 2024 and July 21, 2037, respectively. Its first and last scheduled interest payment dates were July 21, 2019 and July 21, 2037, respectively. MOFED on-lent the proceeds of the loan to Ethiopia's Ministry of Trade and Industry.
The borrower was expected to use the proceeds of the loan to finance approximately 85% of the cost of a $300 million commercial (EPC) contract with China Geo-engineering Construction Overseas Company Group (CGCOC).
The purpose of the project was to construct a 122 hectare industrial park — in the Addis Ababa-Djibouti Port Industrial Economic Corridor — that will house at least 18 Chinese enterprises that produce heavy machinery and power equipment.
More specifically, it involved the construction of access roads and utilities, factories, office spaces, and related infrastructure.
The Adama (Ethiopia-Hunan) Machinery and Industrial Park is located on 300 hectares of land near the city of Adama and is about 100 kilometres to the south-east of the capital Addis Ababa. It is 2 km from the Ethiopia-Djibouti Railway Adama Station, and 300 meters from the Addis-Adama Expressway Exit.
CGCOC was the general EPC contractor responsible for project implementation. However, China Civil Engineering Construction Corporation (CCECC) was also involved (most likely as a subcontractor). Project implementation commenced on November 9, 2017 and the project reached completion on October 7, 2018.
Ethiopia-Hunan (Adama) Industrial Park Operation and Management Company is now responsible for investment promotion and the operation and management of the park.
According to the CGCOC, Hunan companies including Sany Heavy Industry Company, TBEA Hengyang Transformer Company, and Foton Automobile are planning to establish factories in the industrial park.
There are some indications that the China Eximbank loan for Phase III of the Ethiopia-Hunan Industrial Park Project may have financially underperformed vis-a-vis the original expectations of the lender.
According to the Government of Ethiopia’s Aid Management Platform, as of September 2019, ICBC suspended about $67 million worth of loan disbursements 'due to [the] cross-default situation of the country’ (see Record ID#58616).
Then, in August 2021, China Eximbank withheld $339 million loan disbursements for 12 projects and halted project implementation due to Government of Ethiopia’s rapidly dwindling foreign exchange reserves and debt sustainability challenges.
Then, after considerable delay, the G20 Common Framework (CF) creditor committee for Ethiopia convened in September 2021, with the French Government and the Chinese Government serving as co-chairs. The CF debt rescheduling talks were still ongoing in mid-2023.
Staff Comments
- This project is also known as the Ethiopia Adama (Ethiopia-Hunan) Machinery and Industrial Park Project. Its Chinese name is 埃塞俄比亚-湖南工业园 or 埃塞俄比亚-湖南工业园项目.
- The system identification number for this project in the Government of Ethiopia’s Aid Management Platform (AMP) is 87143436113645.
- Through this project and others like it, Hunan Province is promoting the relocation of equipment manufacturing capacity and extraction in the machinery, steel, iron, energy and engineering industries via outbound investment and overseas project contracts.
- One official source (https://www.dropbox.com/scl/fi/5nwg72mj7unyc41tgsmh1/List-of-Ethiopia-China-Cooperation-Major-Projects-from-Ethiopia-s-Ministry-of-Finance-September-2024.xlsx?rlkey=v9vjryd8kmq0bzshgocuma6mb&dl=0) indicates that this project had not yet commenced construction as of September 2024. This issue warrants further investigation.
- The loan identification number in the Government of Ethiopia’s Debt Management and Financial Analysis System (DMFAS) is 20953000 and the corresponding project name in DMFAS is ‘EBC 17/16 ADAMA INDUSTRAL PARK’. See https://www.dropbox.com/scl/fi/je0aon75miofi6mt4q5q9/MOFED-Loan-Level-Data-on-Borrowing-Terms-and-Loan-Performance-September-2024_PUBLIC.xlsx?rlkey=murbb074v1px7g4njt0utzxnf&dl=0
Sources & References
- Ethiopia: Parliament Approves $860m Loan Agreements, “埃塞俄比亚－湖南工业园”即将破土动工
- Adama Industrial Park Inaugurated in Oromia region
- Ethiopian Government and China EXIM Bank Signed Loan Agreement on Industrial Zone Implemented by CGCOC
- Remarks by Ambassador Tan Jian at the Adama Industrial Park Inauguration Ceremony
- China Provides 260 M USD for Construction of Industrial Park in Adama Featured
- 驻埃塞俄比亚大使谈践出席阿达玛工业园开园仪式
- Ethiopia’s Parliament approves seven loan agreements
- Ethiopia to inaugurate 2 Chinese built industrial parks
- 埃塞俄比亚-湖南工业园贷款协议及第二批入园企业投资合作备忘录在长沙签署
- 进出口银行签署埃塞俄比亚-湖南工业园项目贷款协议, https://books.google.com/books?id=Vvx9DwAAQBAJ&pg=PA244&lpg=PA244&dq=%22Adama%22+%22Industrial+Park%22+%22loan%22+%22hunan%22&source=bl&ots=aWpZIqsbKO&sig=ACfU3U3ne4N_Iy6wSsfn_OlzrPAarTuDFg&hl=en&sa=X&ved=2ahUKEwjHpb2EhaPoAhUxYTUKHQ-SBBYQ6AEwCHoECAoQAQ#v=onepage&q=%22Adama%22%20%22Industrial%20Park%22%20%22loan%22%20%22hunan%22&f=false
- China to manage Adama Industrial Park
- Promotion of Cooperation between Hunan and Africa (III)
- 中地海外集团签署成立埃塞机械装备制造园合资运管公司协议
- Overseas Economic and Trade Cooperation Zone
- Chinese contractor says Ethiopia's Dire Dawa industrial park nearing completion, 2/22/2020 又 行 新闻 _Exim Bank of China www .eximbank.gov .cn/info/news/201806/t20180610_2658.html 2 / 3 Export-Import Bank signs loan agreement for Ethiopia - Hunan Industrial Park project
- 新华网、中新网、湖南日报、新湖南
- 理顺协调工作机制 埃塞俄比亚湖南工业园建设红火
- 埃塞俄比亚-湖南工业园开工建设
- 进出口银行签署埃塞俄比亚-湖南工业园项目贷款协议
- Investment Guide
- Amb. Tan Jian Attends the Inauguration Ceremony of Adama Industry Park
- China Provides 260 mln USD for Construction of Industrial Park in Adama
- High number of foreign investor delegations visit Ethiopia this week
- Ethiopian PM inaugurates Adama Industrial Park
- China Provides 260 mln USD for Construction of Industrial Park in Adama
- Adama Industrial Park Inaugurated
- Ethiopia export revenue hits 42 mln USD from industrial parks in six months
- E. African leaders inaugurate Chinese-built dev't projects in Ethiopia
- 进出口银行签署埃塞俄比亚-湖南工业园项目贷款协议
- Ethiopia Adama (Ethiopia- Hunan) Machinery and Equipment Manufacturing Industrial Park Project
- Ethiopian-Hunan Industrial Park under Construction, 【埃塞俄比亚】埃塞俄比亚—湖南工业园
- 埃塞俄比亚湖南工业园
- 集团公司承建的埃塞阿达玛工业园招商走进湖南企业和智库
- 中国将提供85%软贷款，与埃塞合建3亿美元工业园
- 埃塞俄比亚六大中国工业园详解
- Ethiopia to Construct Industrial Park for Manufacturing Machineries
- CGCOC signed agreement on the joint operation and management of Ethiopian Machinery and Equipment Industrial Zone
- IPDC – Adama Industrial Park – Ethiopia
- 推动湘非合作（三）
- 深化产能合作对接 共建埃塞俄比亚-湖南工业园
- Export-Import Bank of China Loan Agreement for financing the Ethiopia Adama (Ethiopia –Hunan) Machinery and Industrial Park Project Ratification Proclamation
- MOFED Loan-Level Data on Borrowing Terms and Loan Performance September 2024_PUBLIC
- List of Ethiopia- China Cooperation Major Projects from Ethiopia's Ministry of Finance September 2024 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
Ethiopia Ministry of Finance and Economic Development
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