Completed Mixed AidData Chinese Aid

China Eximbank provides $55 million preferential buyer’s credit for Phase 1 of Load Dispatch Center Project

$55M USD

Funder	Export-Import Bank of China (China Eximbank)
Recipient Organization	Électricité du Laos (EDL)
Country	Lao People's Democratic Republic
Start Date	Jan 01, 2009
End Date	Nov 12, 2028
Duration	7,255 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`49625`

Grant Description

China Eximbank provides $55 million preferential buyer’s credit for Phase 1 of Load Dispatch Center Project In 2009, China Eximbank and Électricité du Laos (EDL) — a Lao state-owned power company — signed a $55 million preferential buyer’s credit (PBC) agreement for Phase 1 of the Load Dispatch Center Project.

📋 Loan / Grant Terms

📅 Maturity22.2696 years

⏳ Grace Period6.975 years

💹 Interest Rate2.3143%

The borrower was expected to use the proceeds of the loan to partially finance a commercial (EPC) contract with Alcatel-Lucent Shanghai Bell.

The purpose of the project was to develop the National Load Dispatch Center (LDC) to improve operational efficiency of the Lao power grid and facilitate its integration with other GMS power systems. It involved the laying of fiber optic cable to link the LDC to 16 power stations. Alcatel-Lucent Shanghai Bell was the EPC contractor responsible for implementation.

A formal groundbreaking ceremony took place on November 28, 2009. Then, on September 11, 2013, a project completion ceremony was held.

There are multiple indications that the China Eximbank loan for this project may have financially underperformed vis-a-vis the original expectations of the lender. In 2020, the Laotian authorities urgently sought debt relief from China Eximbank.

At that time, the gross reserves of the Bank of Laos stood at only 1.5 months of import cover and credit rating agencies warned of a high default probability.

In 2020, China Eximbank also agreed to reprofile multiple loan agreements that it had previously signed with the Government of Laos (as captured via Record ID#96464).

These debt service payment deferrals lasted for approximately 4-years (2020 and 2023) and provided approximately $1.892 billion of cash flow relief ($1.422 billion in deferred principal payments and $470 million in deferred interest payments). Deferred principal and interest repayments in 2020 were worth $202 million.

Deferred principal and interest payments were worth $426 million in 2021. Deferred principal and interest payments were worth $594 million in 2022. Deferred principal and interest payments were worth $670 million in 2023.

📋 Staff Comments

The Chinese project title is 贷建设的老挝电力调度中心项目 or 建设的老挝电力调度中心项目.
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 Laos was 22.2696-years in 2009. AidData estimates the maturity of the China Eximbank loan that supported Phase 1 of the Load Dispatch Center Project by using this figure. See https://www.dropbox.com/scl/fi/uno1hf2pjg3nfz78h72c6/Private-and-Official-Sector-PRC-Borrowings-and-Borrowing-Terms-of-Lao-PDR-September-2024.xlsx?rlkey=s7eas067aykllu1lik074l5x5&dl=04. 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 Laos was 6.975-years in 2009. AidData estimates the grace period of the China Eximbank loan that supported Phase 1 of the Load Dispatch Center Project by using this figure. See https://www.dropbox.com/scl/fi/uno1hf2pjg3nfz78h72c6/Private-and-Official-Sector-PRC-Borrowings-and-Borrowing-Terms-of-Lao-PDR-September-2024.xlsx?rlkey=s7eas067aykllu1lik074l5x5&dl=05. 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 Laos was 2.3143% in 2009. AidData estimates the interest rate of the China Eximbank loan that supported Phase 1 of the Load Dispatch Center Project by using this figure. See https://www.dropbox.com/scl/fi/uno1hf2pjg3nfz78h72c6/Private-and-Official-Sector-PRC-Borrowings-and-Borrowing-Terms-of-Lao-PDR-September-2024.xlsx?rlkey=s7eas067aykllu1lik074l5x5&dl=0

📚 Sources & References

Lao PDR Power Dispatching Center Phase I Project Supported by You Loan Fund Launched Ceremony
中国优惠贷款资金支持老挝发展电力事业
Implementation Completion and Result Report (IDA-H3000)
Completion ceremony of China-loaned Laos National Electric Corporation power dispatching center I was held 我优贷资金支持的老挝国家电力公司电力调度中心一期项目举行启用仪式
Laos Expands the Grid
中方优贷建设的老挝电力调度中心项目奠基
关华兵大使出席老挝国家电力公司电力调度中心一期项目启用仪式
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.