Completed Development AidData Chinese Aid

China Eximbank provides $312 million loan for Phase 2 of Lusaka Urban Road (L400) Upgrade Project (Linked to Record ID#57194, #57190, #31329)

$312.81M USD

Funder	Export-Import Bank of China (China Eximbank)
Recipient Organization	Government of Zambia
Country	Zambia
Start Date	Jan 01, 2016
End Date	Aug 09, 2030
Duration	5,334 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`57218`

Grant Description

China Eximbank provides $312 million loan for Phase 2 of Lusaka Urban Road (L400) Upgrade Project In 2016, China Eximbank and the Government of Zambia signed a $312,809,500 loan agreement for Phase 2 of the Lusaka Urban Road (L400) Upgrade Project.

📋 Loan / Grant Terms

💰 Loan Amountare unknown

However, it is known that the borrower was expected to use the proceeds of the loan to finance a commercial contract that it signed with Aviation Industry Corporation of China (AVIC) and Zhejiang Communications Construction Group (ZCCG) in 2013.

It was originally envisaged that Phase 2 would involve the construction, rehabilitation, and expansion of 146 kilometers of roads in Lusaka — including but not limited to Lumumba road (7.120 km), Mungwi road (6.659 km), Great North Road (6.610 km) and Ngwerere to Kasisi Road (21 km). The project also involved the rehabilitation of 9.9 km of roads in Chilenje, Sate Lodge.

AVIC International Project Company, AVIC International Zambia Limited, and Zhejiang Communications Construction Group were the main contractors responsible for implementation, but they also hired 41 sub-contractors. Phase 2 construction activities commenced on June 15, 2017. By the end of 2018, 168.6 kilometers of road had been completed, representing a 115% physical progress rate.

The increase was the result of design changes and consequently cost savings. The savings were used to construct the additional 22 kilometers of road. According to Zambia's Road Development Authority (RDA) 2019 Annual Report, the project was completed.

On January 3, 2019, ZCCG completed the construction of the last kilometer of the Pendlela road, which officially marked the completion of Phase 2.

📋 Staff Comments

The Chinese project title is 赞比亚卢萨卡L400项目（二期).
In 2013, China Eximbank also provided a loan for Phase 1 of the L400 Project (captured via #31329). In 2018, China Eximbank and ICBC provided additional loans for for Phase 3 of the L400 Project (captured via Project ID#57190 and ID#57194.
According to the World Bank's Debtor Reporting System (DRS), the weighted average grace period of all official sector lending from all Chinese creditors to government and government-guaranteed borrowing institutions in Zambia was 4.3254-years in 2016. AidData estimates the grace period of the China Eximbank loan that supported Phase 2 of the Lusaka Urban Road (L400) Upgrade Project by using this figure. See https://www.dropbox.com/scl/fi/uyz6w7q31x2o8i6rna7ug/DRS-May-2024-Extraction-Official-Chinese-Loan-Commitments-to-Zambia.xlsx?rlkey=n0a6270w91pdmmfyaoqva419r&dl=0 4. According to the World Bank's Debtor Reporting System (DRS), the weighted average maturity of all official sector lending from all Chinese creditors to government and government-guaranteed borrowing institutions in Zambia was 16.0126-years in 2016. AidData estimates the maturity of the China Eximbank loan that supported Phase 2 of the Lusaka Urban Road (L400) Upgrade Project by using this figure. See https://www.dropbox.com/scl/fi/uyz6w7q31x2o8i6rna7ug/DRS-May-2024-Extraction-Official-Chinese-Loan-Commitments-to-Zambia.xlsx?rlkey=n0a6270w91pdmmfyaoqva419r&dl=0 5. According to the World Bank's Debtor Reporting System (DRS), the weighted average interest rate of all official sector lending from all Chinese creditors to government and government-guaranteed borrowing institutions in Zambia was 3.4612% in 2016. AidData estimates the interest rate of the China Eximbank loan that supported Phase 2 of the Lusaka Urban Road (L400) Upgrade Project by using this figure. See https://www.dropbox.com/scl/fi/uyz6w7q31x2o8i6rna7ug/DRS-May-2024-Extraction-Official-Chinese-Loan-Commitments-to-Zambia.xlsx?rlkey=n0a6270w91pdmmfyaoqva419r&dl=0

📚 Sources & References

Mid-Year Economic Review
RDA starts phase 2 Lusaka roads rehabilitation
L-400 ROAD PROJECT CHANGES LUSAKA
RDA Annual Report 2018
A swirling fog of debt
Roads Magazine
January 2020
ANNUAL ECONOMIC REPORT 2016, 2020 Road Sector Annual Work Plan
Report of the Auditor General on the Road Projects Under the Road Development Agency FOR THE Period January, 2012 to December, 2015, 2021 Road Sector Annual Work Plan
RDA 2019 Annual Report
China Loans to Africa 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.