China Eximbank provides EUR 200 million loan to ZTE to set up South Sudan's telecommunication network

📋 Staff Comments

1. Aztan law firm in Sudan notes on its website that it advised ZTE on an EUR 200 million loan that it finalized with MTN Sudan in 2012. This loan appears to have supported a telecommunications network expansion project in South Sudan. The Chinese name of the project is 中兴通讯MTN扩容项目. However, it is unclear if this is the same loan as the EUR 200 million loan referenced by ZTE's subsidiary in South Sudan. It is possible that China Eximbank provided an export seller's credit to ZTE, which it in turn used the proceeds of the loan to provide vendor financing (i.e a supplier's credit) to MTN Sudan Company Limited (which later split into MTN Sudan and MTN South Sudan). MTN acknowledges in its 2014 bond prospectus that 'we have made substantial equipment purchases from, and have entered into vendor financing arrangements with, Ericsson, Huawei and ZTE in certain jurisdictions.' In the same bond prospectus, MTN discloses that one of its subsidiaries -- MTN Sudan Company Limited -- received euro-denominated vendor financing in 2012. However, AidData has not yet independently confirmed that China Eximbank provided an export seller's credit to ZTE which it then on-lent to MTN for its activities in South Sudan.
2. This loan is omitted from the SAIS-CARI database of Chinese loan commitments that was released in July 2020.
3. South Sudan state was founded on July 9, 2011. This loan was made to the Southern Sudan Autonomous Region.

📚 Sources & References

• Investment in South Sudan: the opportunity and the challenge coexist (2)
• Strategy of ‘Parallels’: China in the South Sudanese armed conflict
• 投资南苏丹：风险与利益并存
• MTN (MAURITIUS) INVESTMENTS LIMITED
• Aztan Network
• Aztan Network
• MTN embarks on network expansion project
• RE- Query re- loan agreement between MTN Sudan and ZTE
• China-Africa Trade and Economic Cooperation Special
• ZTE's Sustainability Report 2023 highlights advancing digital innovation for more sustainable future 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.