Active Mixed AidData Chinese Aid

China Eximbank provides $198.24 preferential buyer's credit for First Phase of Yachay City of Knowledge Project (Linked to Record ID#39113)

$198.24M USD

Funder	Export-Import Bank of China (China Eximbank)
Recipient Organization	Ecuador Ministry of Economy and Finance
Country	Ecuador
Start Date	Feb 25, 2016
End Date	Oct 29, 2027
Duration	4,264 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`58513`

Grant Description

China Eximbank provides $198.24 preferential buyer's credit for First Phase of Yachay City of Knowledge Project On February 25, 2016, China Eximbank and Ecuador's Ministry of Finance signed a $198,244,300 preferential buyer’s credit (PBC) agreement for the First Phase of the Yachay City of Knowledge Project.

📋 Loan / Grant Terms

💰 Loan Amountcarries the following borrowing terms: a 3% interest rate

⏳ Grace Period5 years

💹 Interest Rate3%

The borrower was expected to use the proceeds of the loan to partially finance a commercial contract with China Gezhouba Group Corporation (CGGC), which was signed in November 2015.

The Central Bank of Ecuador was also required to open and maintain a minimum cash balance in an escrow account ("cuenta de depósito") in China Eximbank as a source of security for the PBC.

The loan’s (principal) outstanding amount was $121,448,037.34 as of December 31, 2021 and $113,072,310.66 as of November 30, 2022.

The first phase of the Yachay City of Knowledge Project primarily involved the provision of equipment and the installation of electricity and telecommunications infrastructure.

The project site is an 18-square mile planned community expected to house technology and innovation parks in addition to Yachay Tech University, which opened in 2014 with an initial 187 students. CGGC was the contractor responsible for project implementation. Construction began in July 2012 and Phase 1 was originally expected to take 28 months to complete (December 2014).

The project as a whole, including all of its phases, was expected to reach completion within 10-years.

The goal of Yachay is to create a culture of scientific research in Ecuador and promote a long-term state of the art site for technological research. Developers also indicated that there would be an emphasis on nanotechnology.

Long-term goals included the development of knowledge-based products to diversify the Ecuadorian economy and the development of new technologies for the country's well-being. The Yachay project faced many setbacks during implementation. President Lenin Moreno said there were structural and issues associated with the project.

One major problem reported by the comptroller was the creation of buildings before sewerage systems were installed.

📋 Staff Comments

According to a news release from the Ministry of Economy and Finance site, the Yachay project was financed through the $5.3 billion credit line captured via Record ID#39113.
The Ecuadorian Ministry of Finance loan identification number is 23182000.
References to the escrow account can be found at https://www.finanzas.gob.ec/wp-content/uploads/downloads/2016/07/2578.pdf%20and%20https://www.finanzas.gob.ec/wp-content/uploads/downloads/2016/06/2252.pdf4. The escrow (deposit) account number is No.
See https://vlex.ec/vid/autoricese-cuenta-no-1360000100000815216-649249201 and https://www.bce.fin.ec/images/junta/resolucion271-2016g.pdf?dl=0 and https://www.bce.ec/images/transparencia2021/juridico/codificacionresolucionesmonetariasfinancierasvaloresyseguros3.pdf

📚 Sources & References

Building Development for a New Era: China’s Infrastructure Projects in Latin America and the Caribbean
Direccion Nacional De Auditoria De SEctores Sociales
Crédito para proyecto Ciudad del Conocimiento Yachay
Are China’s Loans to Ecuador a Good Deal? The Case of the Sopladora Hydro Project
CGGC contracted for Ecuador's Yachay Knowledge City Project
China-Latin America Finance Database
Boletín de Ejecución Presupuestaria Enero - Marzo 2016
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All Grantees

Ecuador Ministry of Economy and Finance

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