China Eximbank provides RMB 998.8 million government concessional loan for Transformation of National Analog TV into Terrestrial Digital TV Project

China Eximbank provides RMB 998.8 million government concessional loan for Transformation of National Analog TV into Terrestrial Digital TV Project On May 20, 2017, China Eximbank and the Government of the Republic of Congo signed a government concessional loan (GCL) agreement [CHINA EXIMBANK GCL NO. (2017) 06 TOTAL NO. (611)] worth RMB 998,873,400 (or $161,630,000) for the Congo Transformation of National Analog TV Into Terrestrial Digital TV Project.

The GCL carries the following terms: a maturity of 20-years, a grace period of 5-years, an interest rate of 2%, a default (penalty) interest rate of 0%, a management fee of 0.50%, and a commitment fee of 0.50%. The borrower agreed to deposit project-related revenues in an escrow account to facilitate repayment.

The proceeds of the GCL were to be used by the borrower to finance a commercial contract [number TB(CG)15001] worth $161,630,000 between the Government of the Republic of Congo and StarTimes Software Technology Co., Ltd, which was signed on July 15, 2015.

Then, on August 12, 2017, the lower house of Congo’s National Assembly passed the Congo Digital Television Conversion Act and agreed to create a joint venture with StarTimes — called Star Média Congo — to facilitate the implementation of the project.

There are some indications that the China Eximbank loan for the Transformation of National Analog TV into Terrestrial Digital TV Project financially underperformed vis-a-vis the original expectations of the lender.

The project encountered significant implementation delays due to a fall in oil prices in 2018 and 2019, which reportedly made more difficult for the Congolese authorities to meet their outstanding debt obligations to China Eximbank.

After China Eximbank and the Republic of Congo signed a debt restructuring agreement in 2019, project implementation reportedly restarted.

However, in 2020, China Eximbank and the Republic of Congo signed a debt suspension agreement as part of the G-20 Debt Service Suspension Initiative (DSSI).

Under the terms of the agreement, the lender agreed to suspend principal and interest payments due between May 1, 2020 and December 31, 2020 under multiple buyer’s credit loan (BCL) agreements and multiple government concessional loan (GCL) agreements (as captured via Record ID#95566 and ID#95571).

Debt service payments under many of these loan agreements were again deferred in 2021 (as captured via Record ID#95573, 95572, 95570, and 95568). The IMF assessed the Republic of Congo to be in debt distress in 2021, 2022, and 2023.