ICBC provides $72.5 million loan for Oyem Stadium Construction Project

ICBC provides $72.5 million loan for Oyem Stadium Construction Project In 2016, the Industrial and Commercial Bank of China (ICBC) signed a $72,595,031.60 loan agreement with the Government of Gabon for the Oyem Stadium Construction Project.

The proceeds of the loan were to be used by the borrower to finance a July 3, 2015 commercial contract between the Government of Gabon, China State Construction Engineering Group Corp LTD, and Shanghai Construction Group. The project involved the construction of a stadium in Oyem with 20,500 seats and field size of 105 x 68m.

China State Construction Engineering Group Corp LTD and Shanghai Construction Group were the contractors responsible for implementation.

A groundbreaking ceremony took place on September 2, 2015 and the project was completed in advance of the 2017 Africa Cup of Nations football tournament. The stadium was officially inaugurated on January 9, 2017.

There are some indications that the ICBC loan for the Oyem Stadium Construction Project may have financially underperformed vis-a-vis the original expectations of the lender.

In mid-2014, a decline in international oil prices generated sharp reductions in Gabon’s oil exports and fiscal revenues. The country’s rising fiscal deficit led to the accumulation of arrears to external creditors.

By 2017, the stock of the Government of Gabon’s external arrears stood at $115 million, including arrears to China, Canada, Germany, Spain, France, Israel, and South Korea. All of these arrears were successfully cleared by 2020. However, the Government of Gabon accumulated $3 million of additional arrears to Chinese creditors in 2020.

By the end of May 2021, ‘the stock of [the Government of] Gabon’s external arrears stood at CFAF 98.03 billion (US$182.1 million), including CFAF 23.8 billion (US$44.2 million) vis-à-vis multilaterals and CFAF 21.05 billion (US$39.1 million) vis-à-vis government agencies and private creditors insured with companies from Paris Club member countries and from China [ICBC and China Construction Bank] CFAF 1.3 billion (US$2.42 million).

The Government's strategy for the clearance of existing external arrears consists of focusing primarily on multilateral debt, bilateral debt, insured commercial commitments and seeking agreements with other creditors prior to the IMF Board meeting. Accordingly, we will clear the arrears vis-à-vis the multilaterals.

We will also clear bilateral and commercial-insured arrears as follows: (i) Austria CFAF 6.83 billion (US$12.69 million); (ii) France CFAF 11.9 billion (US$22.11 million); (iii) Israel CFAF 2.23 billion (US$4.13 million); and Spain CFAF 0.09 billion (US$0.17 million).

Regarding the other commercial arrears vis-à-cis AFREXIMBANK (CFAF 7.52 billion or US$13.97 million, and commercial non-insured vis-à-vis France CFAF 0.7 billion (US$1.24 million), Austria CFAF 8.71 billion (US$16.18 million), and Morocco CFAF 1.01 billion (US$1.87 million), we contacted these creditors individually to obtain from them the non-objection agreement.

The same communication was made with China to which our bilateral payment arrears are about CFAF 34.01 billion (US$63.17 million).’ Then, in 2022, the IMF reported that the Government of Gabon’s external arrears to Chinese creditors stood at $23.9 million as of December 2021 and $1 million in June 2022.

Gabonese Directorate General for Debt indicated that the loan was in the process of being repaid, but no details on timeline (Source ID: 210808).