China Eximbank provides $3 billion oil-backed master loan framework agreement for infrastructure projects

China Eximbank provides $3 billion oil-backed master loan framework agreement for infrastructure projects On July 29, 2008, China Eximbank and the Government of Sudan signed a $3 billion oil-backed master loan framework agreement (line of credit) to finance various infrastructure projects.

This resources-for-credit cooperation package was collateralized with future revenues from the sale of oil exports and the cash proceeds from these oil export sales appear to have been deposited in a China Eximbank escrow account.

Between 2008 and March 2009, at least twelve loans for eight projects were approved through the framework agreement: $59 million loan for the Sennar Bridge Construction Project (as captured via Record ID#47051) $612 million loan for the 405MW Al-Fulah Gas-Fired Power Plant Construction Project (as captured via Record ID#1007) $233 million loan for the South Kordofan 220kV Power Transmission and Distribution Project (as captured via Record ID#979) $24 million loan for the Dali and Mazmoom Water Supply Project (as captured via Record ID#1052) $118 million loan for the Khartoum Housing Construction Project (as captured via Record ID#47042) $29.9 million loan for the Blue Nile Agricultural Project (as captured via Record ID#2452) $63 million loan for the 141 km Umm Ruwaba-Abu Gebieha Road Project (as captured via Record ID#73214). $650 million loan for the 1200 km Western Salvation Highway Project (Umbrella Record ID#54079) is comprised of the following sub-projects: -$90 million loan for the 185 km El Dibeibat-El Fula Road Construction Project (as captured via Record ID#1053) -$86 million loan for the 168 km El Fashir-Um Kaddada Road Construction Project (as captured via Record ID#1051) -$110 million loan for the 211 km El Nahood-Um Kadada Road Construction Project (as captured via Record ID#1050) -$119 million loan for the 340 km Renk-Malakal Road Construction Project (as captured via Record ID#1059) -$120 million USD for the 157 km Zalingei-El Geneinah Road Construction Project (ID#1013) These borrowings through the framework agreement amounted to approximately $1.8 billion.

There are some indications that some of the subsidiary loans issued through the framework agreement may have underperformed vis-a-vis lender expectations.

In August 2010, the Economic and Commercial Counsellor's Office of the Chinese Embassy in Sudan reported that the Government of Sudan was unable to make some loan repayments to China Eximbank.

Then, according to Sudan’s Finance Minister Ali Mahmood Abdel-Rasool, China Eximbank suspended its financing for 11 projects in Sudan following the secession of South Sudan in July 2011, which triggered a major loss of oil revenue (a key source of collateral for China Eximbank loans).

Ali Mahmood Abdel-Rasool said at the time that the Government of Sudan had previously pledged oil revenues (worth 120,000 barrels per day) to China Eximbank as a source of collateral.

Then, on February 18, 2012, the Chinese Government announced that it had agreed to reschedule the outstanding debt obligations of the Government of Sudan by extending loan repayment periods by 5-years (as captured via Record ID#30421).

According to the External Debt Unit of the Central Bank of Sudan, the Government of Sudan's total arrears to Chinese creditors amounted to $3.864 billion ($2.608 billion in principal, $1.129 billion in interest, and $127 million in penalty interest) as of March 31, 2022.