China Eximbank contributes $229,509,300 USD million to syndicated buyer’s credit loan for EETC 500KV Transmission Lines Project (Linked to Record ID#98763 and #58351)

In 2017, Chinese banks contribute to USD 690,018,600 million to syndicated buyer’s credit loan for EETC 500KV Transmission Lines Project, Egypt On January 21, 2016, the President of Egypt, Abdel Fattah El Sisi, and the President of China, Xi Jingping signed an Economic and Technical Cooperation Agreement (ETCA) in which the parties agreed to upgrade the capabilities of Egypt’s national 500kV backbone power grid.

Then, on May 15, 2017, during a Belt and Road Forum in Beijing, the Egyptian Electricity Transmission Company (EETC) signed a $690,018,600 syndicated buyer’s credit loan agreement with three Chinese state-owned banks — the Export-Import Bank of China (China Eximbank), which served as the lead arranger, China Development Bank (CDB), and the Beijing Branch of Bank of China (BOC) — for the EETC 500KV Transmission Lines Project.

China Development Bank contributed $231,000,000 to the loan syndicate (captured in Record ID#58351). China Eximbank and Bank of China contributed the remaining $459,018,600. AidData assumes that both members contributed equally ($229,509,300) (captured in Record ID#53069 and #98763). The loan carried a 15-year maturity.

Its interest rate and grace period are unknown. Sinosure provided long-term buyer’s credit insurance to the borrower. Egypt’s Ministry of Finance also issued a sovereign guarantee in support of the loan in June 2017.

The proceeds of the syndicated loan were to be used by the borrower to finance 85% of the total cost ($811,790,000) of an engineering, procurement and construction (EPC) contract that EETC signed with State Grid Corporation of China (SGCC) on January 21, 2016. EETC assumed responsibility for the remaining 15% through an advance payment to SGCC.

This project involved the construction of 1,210 km of high voltage (500 kV double-circuit AC) overhead transmission lines in the northern, central and southern parts of the Nile River Delta region. The lines were mainly distributed in areas near gas-fired power stations in the east of the Nile River Delta region.

The project was implemented in two phases and divided into 15 segments (or ‘lots’).

It was envisaged that the project would increase the supply of reliable power to the Nile River Delta region, promote upstream and downstream industries in Egypt, and create 7,000 new jobs.

China Electric Power Equipment and Technology Co., Ltd. (CET) — a subsidiary of SGCC — was the general contractor responsible for the implementation.

However, it hired several subcontractors, including China Energy Engineering Corporation (CEEC), Hubei Engineering Co., Ltd., and Power Construction Corporation of China (PowerChina).

It also hired Jiangsu Zhongtian Technologies Software Technology Co., Ltd, a private Chinese company, for all line equipment and electric metal fittings. The project officially commenced on May 6, 2016.

Then, on November 3, 2016, 3 transmission lines with a total length of 380 km (part of Phase 1) were successfully put into operation. In May 2017, the construction of an additional transmission line was completed. On September 4, 2017, an agreement on Phase 2 was signed during the BRICS summit.

The same month witnessed the completion of a 94 km section that began in April 2016 and was undertaken by Hubei Engineering Co., Ltd. By the end of 2017, the borrower had drawn $115,000,000 from CDB’s contribution to the syndicated loan.

However, the size of the borrower’s drawdowns from the Bank of China’s contribution and China Eximbank’s contribution are unknown. Another 80 km segment was completed on November 26, 2018.

Two additional transmission lines — an 80 km line from Samanoud to Banha and a 94 km line from Borosus to Samanoud — were completed by Hubei Engineering Co., Ltd. in January 2019. As of mid-2019, the project had achieved a 96% completion rate. By the end of June 2019, another 194 km of lines were constructed and the project reached full completion.