Completed Mixed AidData Chinese Aid

China Eximbank provides $334.65 million preferential buyer’s credit for 240MW Kaléta Hydroelectric Power Plant Construction Project (Linked to Record ID#187 and ID#91941)

$334.65M USD

Funder	Export-Import Bank of China (China Eximbank)
Recipient Organization	Government of Guinea
Country	Guinea
Start Date	Jan 04, 2013
End Date	Nov 08, 2027
Duration	5,421 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`53003`

Grant Description

China Eximbank provides $334.65 million preferential buyer’s credit for 240MW Kaléta Hydroelectric Power Plant Construction Project On January 4, 2013, the Export-Import Bank of China signed a $334.65 million preferential buyer’s credit (PBC) agreement [CHINA EXIMBANK PBC NO. (2013) 49 TOTAL NO. (437)] with the Government of Guinea for the 240MW Kaléta Hydroelectric Power Plant Construction Project.

📋 Loan / Grant Terms

📅 Maturity20 years

⏳ Grace Period9 years

💹 Interest Rate2%

The Government of Guinea used the proceeds from the PBC to on-lend to a project company and special purpose vehicle (SPV) called Société De Gestion de Kaléta (SOGEKA or 凯乐塔电站管理公司).

The borrower (SOGEKA) was expected to use the proceeds of the PBC to finance 75% of the cost of a $446 million commercial (EPC) contract between China International Water & Electric Corporation and the Government of Guinea, which was signed on August 15, 2011.

As of June 30, 2020 and December 31, 2020, SOGEKA’s outstanding repayment obligations under the China Eximbank PBC agreement amounted to $404.14 million.

SOGEKA also signed a power purchase agreement (PPA) with the state-owned power utility, Electricité de Guinée (EDG), and agreed that once the Kaléta dam was operational, it would use the proceeds from the sale of electricity (generated by the dam) to secure and facilitate the repayment of the China Eximbank loan.

The borrower was also required to maintain a minimum cash balance in a lender-controlled escrow account. The escrow account balance was EUR 42.5 million in 2020 and 2021.

When SOGEKA was first established, the Government of Guinea held a 51% equity stake and China International Water & Electric Corporation held a 49% equity stake.

However, on November 2, 2016, China Three Gorges Corporation purchased the Government of Guinea’s 51% equity stake for $200 million.

The Government of Guinea used the $200 million to meet the requirement in a separate China Eximbank preferential buyer’s credit agreement (captured via Record ID#187) that covers 15% of the total cost ($1.383 billion) of the 450MW Souapiti Hydroelectric Power Plant Construction Project.

The Kaléta Hydroelectric Power Plant Construction Project involved the construction of a 240 MW dam that is located 110 km north of Conakry on the Konkouré River. The facility includes a roller-compacted concrete dam 72 feet in height by 5,069 feet in length.

The dam impounds a reservoir that has 23 million cubic feet of storage capacity and the facility’s powerhouse has three 80-MW vertical axis Francis turbines.

China International Water & Electric Corporation — a subsidiary of China Three Gorges Corporation — was the engineering, procurement, and construction (EPC) contractor responsible for implementation. Construction began on April 18, 2012. Kaléta dam began to fill water in April 2015. The turbines began to run and distribute electricity ahead of schedule on May 29, 2015.

The power plant was constructed according to Chinese technical specifications, and 90% of its electromechanical equipment came from China. The dam was officially put into use on September 29, 2015. Then, an official project completion ceremony took place on October 10, 2015.

As of January 31, 2019, the Kaléta hydroelectric power plant had generated 2.708 billion kilowatt-hours of electricity. It reportedly doubled Guinea's electricity supply.

Electricity subsidies from the Government of Guinea increased to 0.8% of GDP during the first half of 2019 when the country’s state-owned electricity company, the Public Utility Company (EDG), started to pay for the electricity generated by the Kaléta Hydroelectric Power Plant in January 2019.

On January 22, 2015, the Government of Guinea also authorized the ratification of a USD $78,064,538.90 loan agreement with China Eximbank for the Conakry Electricity Network Rehabilitation and Extension Project. The borrowing terms of this loan, which are captured via Record ID#91941, are unknown.

However, it is known that the borrower was to use the proceeds of the loan to finance an amended and expanded version of the commercial (EPC) contract that China International Water & Electric Corporation and the Government of Guinea signed on August 15, 2011.

The purpose of this project was to evacuate power from the Kaléta hydroelectric power plant by constructing and rehabilitating 42 km of transmission lines and several substations, including (1) a 110 kV double circuit transmission line between Matoto substation and Manéah (Maneah) substation; (2) a 225 kV transmission line between Kaléta substation and Manéah substation; and (3) Tombo substation.

The project also involved the acquisition and installation of electronic metering devices. CWE was the general EPC contractor responsible for implementation. However, Guangxi Transmission & Substation Construction Company was also involved as a subcontractor. The commissioning of all substations and transmission lines was completed on July 29, 2015.

The project’s one-year warranty period officially began on August 31, 2015. A project performance certificate was issued on September 9, 2016.

📋 Staff Comments

The French project title is Centrale hydroélectrique de Kaléta. The Chinese project title is 凯乐塔水电站项目 or 凯乐塔水电站 or 凯乐塔水利枢纽工程 or 凯乐塔水电站.
The database of Chinese loan commitments that SAIS-CARI released in July 2020 identifies the following borrowing terms (17-year maturity and 5-year grace period). However, AidData records a different set of borrowing terms. In correspondence with AidData’s Executive Director in October 2020, the National Director of Debt and Official Development Assistance at the Republic of Guinea’s Ministry (Mrs. DIALLO Saoudatou SOW) identified the borrowing terms of this loan: a 20-year maturity, a 9-year grace period, a 2% interest rate, and a 0.3% management fee.
In the database of Chinese loan commitments that SAIS-CARI released in July 2020, it identifies China International Water & Electric Corporation rather than China Eximbank as the lender; however, multiple official sources (including the Government of Guinea’s Ministry of Finance) identify China Eximbank as the lender.
In China’s Overseas Development Finance Dataset that Boston University's Global Development Policy Center published in December 2020, the China Eximbank loan commitment year is identified as 2011. However, multiple official sources identify the loan agreement signing (i.e. loan commitment) date as January 4, 2013.
The World Bank’s Debt Reporting System (DRS) indicates that official sector loan commitments from China to the Government of Guinea (and/or entities backed by Government of Guinea repayment guarantees) in 2013 amounted to $387,038,766.
This amount is roughly equivalent to the sum of the $334.65 million loan that China Eximbank issued for the 240MW Kaléta Hydroelectric Power Plant Construction Project (captured via Record ID#53003) in 2013 and the $50 million loan that China Eximbank issued for the SOTELGUI Modernization and Expansion Project (captured via Record ID#64324) in 2013.
More research is needed to determine if the $334.65 million preferential buyer’s credit for 240MW Kaléta Hydroelectric Power Plant Construction Project was collateralized.
In 2017, the Industrial and Commercial Bank of China (ICBC) and China Eximbank pledged to fund the Republic of Guinea for the Lisan-Fomi-Kankan Electricity Transmission Line Project (see Record ID#64408) which is meant to transmit power generated by the Kaleta and Souapiti hydropower plants by constructing 225kV electricity transmission lines between Linsan, Fomi, and Kankan that are 393 kilometers in length.
On pg. 130 of 中国长江三峡集团有限公司2022 年度第六期绿色中期票据募集说明书 (see https://pdf.dfcfw.com/pdf/H2_AN202209231578631372_1.pdf) and pg. 124 of of the July 21, 2022 Preliminary Offering Circular of Three Gorges Finance I (Cayman Islands) Limited (see https://secure.ifastgp.com/ifastgp/bond/relatedBondDocument/2767/CTG%202022%20-%20Prelim%20OC.pdf), an additional China Three Gorges Corporation Limited (CTG)-guaranteed loan to Société De Gestion de Kaléta (SOGEKA or 几内亚凯乐塔电站管理公司) is identified. Its apparent face value is $200 million and its apparent repayment period is September 2019-September 2035. This issue warrants further investigation. One possibility that needs to be explored is if the proceeds of the loan were used by CTG -- or a CTG subsidiary -- to facilitate its acquisition of the Government of Guinea's 51% equity stake in SOGEKA for $200 million on November 2, 2016.

📚 Sources & References

Guinea - 0-Executive Summary
China signs to finance massive hydroelectric dam in Guinea
Guinea increases generating capacity with US$526 million 240-MW Kaleta hydroelectric facility
中国进出口银行2015年年度报告
Guinea increases generating capacity with US$526 million 240-MW Kaleta hydroelectric facility
中国进出口银行融资支持几内亚水电建设
几内亚总统孔戴称赞中水电对外公司在几实施的凯乐塔水电站项目
中国公司承建的几内亚凯乐塔水电站首台机组正式并网发电
几内亚最大水电站竣工 “西非水塔”变西非电塔
几内亚凯乐塔水利枢纽项目进入发电前安装调试阶段
PROJET D’AMÉNAGEMENT HYDROÉLECTRIQUE DE KALETA
Speech by HE Bian Jianqiang Ambassador of China to Guinea at the Inauguration Ceremony of the Kaleta Hydropower Plant
三峡集团王琳总经理访几并出席卡雷塔水电站竣工典礼
GUINEA SELECTED ISSUES
Le Projet de Souapiti 60 ans d’Histoire
Guinée : la gestion de Kaléta et de Souapiti ratifiée par l’Assemblée
几内亚最大水电站竣工 “西非水塔”变西非电塔
Nation helps Guinea achieve electrical stability
凯乐塔水电站点亮西非明珠
几内亚凯乐塔水电站收购及苏阿皮蒂水电站参股投资工作圆满完成
Requête sur les condi1ons d'emprunt pour le prêt du projet de centrale hydroélectrique de Kaleta, 4me-trimestre-BULLETIN-STATISTIQUE-VF-T4-2019-vf-16-juin-2020.pdf
RAPPORT FINANCIER DES ENTREPRISES EN PORTEFEUILLE
Policy Brief: Chinese-Financed Hydropower Projects in Sub-Saharan Africa
Baker McKenzie advises China International Water & Electric Corp. on the development of two hydropower plants in Guinea
Debtor Reporting System (DRS)
Analyse des risques budgétaires pour le budget de l’Etat 2020
L/2013/N°50/CNT Authorizing the ratification of the Preferential Loan Agreement
Kaléta and Souapiti Hydropower Schemes, a success story in Public Private Partnerships
China signs to finance massive hydroelectric dam in Guinea
FOURTH REVIEW UNDER THE EXTENDED CREDIT FACILITY ARRANGEMENT
AND FINANCING ASSURANCES REVIEW—PRESS RELEASE; STAFF REPORT; AND STATEMENT BY THE EXECUTIVE DIRECTOR FOR GUINEA
China Loans to Africa
BULLETIN STATISTIQUE DE LA DETTE PUBLIQUE
BULLETIN STATISTIQUE DE LA DETTE PUBLIQUE Quatrième Trimestre 2020
CTG 2022 - Prelim OC
中国长江三峡集团有限公司2022 年度第六期绿色中期票据募集说明书
Analyse des risques budgétaires pour le budget de l’Etat 2021
Analyse des risques budgétaires pour le budget de l’Etat 2020
PROJET D’INTERCONNEXION ELECTRIQUE 225 KV GUINEE-MALI ETUDES DU TRACE DE LA LIGNE ET D’EVALUATION DE L’IMPACT ENVIRONNEMENTAL ET SOCIAL 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.

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Government of Guinea

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