China Eximbank provides $32.4 million buyer’s credit loan for the Lighting Sri Lanka Eastern Province Project (Negenahira Nawodaya) Project

China Eximbank provides $32.4 million buyer’s credit loan for the Lighting Sri Lanka Eastern Province Project (Negenahira Nawodaya) Project On January 16, 2012, China Eximbank and the Government of Sri Lanka signed a $32,496,000 buyer’s credit loan (BCL) agreement [China Eximbank loan identification number: 2010002032012210071] for the Lighting Sri Lanka Eastern Province Project (Negenahira Nawodaya).

The face value of the BCL was subsequently downsized to 32,413,819.

The BCL went into effect on July 25, 2012.

China Eximbank disbursed an unknown amount in 2012, $11,941,838.89 in 2013, $13,758,502.19 in 2014, and $1,870,504.90 in 2015. The borrower made repayments worth $2,701,152 in 2018, $2,701,152 in 2019, $2,701,152 in 2020 and $2,701,152 in 2021.

The loan's amount outstanding was $27,011,516 as of December 31, 2017, $24,310,364 as of December 31, 2018, $21,609,212 as of December 31, 2019, $18,908,060 as of December 31, 2020, $16,206,908 as of December 31, 2021, and $14,856,334 as of June 30, 2022. By early 2022, it was clear that the loan was non-performing.

On April 12, 2022, the Government of Sri Lanka announced a ‘pre-emptive’ sovereign debt default, noting that it would suspend debt repayments to all external creditors other than multilateral institutions.

Its decision to suspend external debt service reportedly affected all China Eximbank loans with amounts outstanding at the time of the announcement.

The purpose of the project was to supply and deliver the imported materials required for the Lighting Sri Lanka Eastern Province Project (Negenahira Nawodaya).

The project involved the procurement of materials for the construction of new electrification schemes (268 new rural electrification schemes), 106 new low voltage distribution substations, 802 km of low voltage lines, and 273 km of medium voltage reinforcement tower lines and rehabilitation of 200 of low voltage distribution substations.

The goal of the project was to electrify 268 villages in the Trincomalee & Batticaloa Districts.

The contractor responsible for project implementation was Shanghai Electric Power Transmission & Distribution Engineering Co. Ltd. It signed an EPC contract with Ceylon Electricity Board (CEB) on February 21, 2011. The project was completed on January 16, 2015.