Active Development AidData Chinese Aid

China Eximbank signs $1 billion oil-backed loan framework agreement for infrastructure projects (Linked to Record ID#60219, ID#30235, ID#369)

$1M USD

Funder	Export-Import Bank of China (China Eximbank)
Recipient Organization	Government of Republic of Congo
Country	Congo
Start Date	Jan 01, 2012
End Date	Jun 04, 2032
Duration	7,460 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`59273`

Grant Description

China Eximbank signs $1 billion oil-backed loan framework agreement for infrastructure projects In 2012, China Eximbank and the Republic of Congo signed a $1 billion loan framework agreement (captured via Record ID#59273) — also known in the Republic of Congo as the “strategic partnership 2” (“partenariat stratégique 2”) — that allowed the Republic of Congo to obtain China Eximbank loans for infrastructure projects through a securitization mechanism: Société Nationales des Pétroles Congolais (SNPC)—the country’s state-owned oil company—agreed to deposit a portion of the cash proceeds from its oil exports into an escrow account that is controlled by China Eximbank.

The borrower was required to keep a minimum deposit balance of 15-20% of total outstanding loans in an escrow account.

📋 Loan / Grant Terms

📅 Maturity20 years

⏳ Grace Period5 years

According to the Congolese authorities, only one subsidiary loan was approved through this framework agreement: a $1 billion loan in 2012 for the Dolisie-Brazzavile Section of the Pointe-Noire-Brazzaville Road (RN1) Construction Project (captured in Record ID#369).

This oil-backed loan framework agreement was effectively an extension of a previously signed oil-backed loan framework agreement from 2006 (captured via Record ID#60219).

The cash balance in the China Eximbank-controlled escrow account was $534,238,226 (CFA 272,846,414,000) in 2011, an unknown amount in 2012, an unknown amount in 2013, an unknown amount in 2014, an unknown amount in 2015 (equivalent to 26% of SNPC oil sales in 2015), $281,560,937 in 2016 (equivalent to 7,558,672 barrels of oil or 32% of SNPC oil sales in 2016), $338,285,020 in 2017 (equivalent to 23.25% of SNPC oil sales in 2017), $513,780,005 in 2018 (equivalent to 7,411,386 barrels of oil, eight oil cargoes, or 30.22% of SNPC oil sales in 2018), $523,547,187 in 2019 (equivalent to 8,228,065 barrels of oil, 9 oil cargoes, or 32.56% of SNPC oil sales in 2019), $266,659,781 in 2020 (equivalent to 6,349,813 barrels of oil, 7 oil cargoes, or 31.61% of SNPC oil sales in 2020), $319,164,228 in 2021 (equivalent to 4,585,056 barrels of oil or 21.4% of SNPC oil sales in 2021), and $356,343,684 in 2022 (equivalent to 3,634,514 barrels of oil 13.09% of SNPC oil sales in 2022).

📋 Staff Comments

The Congolese authorities disclosed the receipt of a $1 billion loan (under the “strategic partnership 2” or “partenariat stratégique 2”) to the World Bank and the World Bank identified this loan in its September 2014 Republic of Congo Economic Update publication.
In the database of Chinese loan commitments that SAIS-CARI released in July 2020, it identifies a $1.208 billion China Eximbank loan for the Dolisie-Brazzavile Section of the Pointe-Noire-Brazzaville Road (RN1) Construction Project. However, AidData has not identified any official sources that confirm the provision of a $1.208 billion China Eximbank loan.
AidData was unable to identify the exact commitment year of this framework agreement. The World Bank reported the loan to be committed before March 29, 2013, and SAIS CARI reported Dolisie-Brazzavile Section of the Pointe-Noire-Brazzaville Road (RN1) Construction Project, a sub-project funded under this framework agreement, to be committed in 2012.
On pg. 26 of https://pnd.plan.gouv.cg/wp-content/uploads/2018/07/Parlement-CMEB-24-07-18.pdf, the Congolese Government states that “Pour garantir les prêts, les autorités congolaises doivent maintenir un solde minimum de dépôt équivalant à environ 20% du total de l’encours des prêts sur un compte séquestre à l’EXIM Bank de Chine, à partir des ventes de pétrole à la Chine.” [Translation: As a source of collateral, the Congolese authorities are required to keep a minimum cash balance equivalent to twenty percent of total outstanding debt to China Eximbank in an escrow account (that China Eximbank controls) from the proceeds of their oil sales to China.] On this point, also see https://eiti.org/sites/default/files/attachments/republic_of_congo_-_second_validation_final_assessment_clean.pdf and https://eiti.org/sites/default/files/attachments/republic_of_congo_second_validation_msg_comments_en.pdf and https://eiti.org/sites/default/files/attachments/eiti_-_roc_eiti_2017_validation_-_draft_report_on_initial_data_collection_and_stakeholder_co.pdf and https://eiti.org/sites/default/files/attachments/en_eiti_gn_6.2.pdf and https://www.imf.org/-/media/Files/Publications/CR/2019/1COGEA2019001.ashx5. The escrow account balance information is drawn from https://eiti.org/sites/default/files/2022-02/en_eiti_gn_2.6.pdf and https://eiti.org/sites/default/files/2022-07/Republic%20of%20the%20Congo%202020%20EITI%20Report.pdf6. In a July 2023 report, the IMF reported that 'the [Congolese] authorities continued accumulating excess deposits in the escrow account in China during 2020 that provides temporary guarantees for debt service to China. The authorities were able to use escrow account balances during the COVID-19 pandemic for debt service to China but reimbursed the escrow account again with the contractual amount in 2022 to meet their contractual obligations, including deposits guaranteeing the payment of three future semi-annual debt service installments.' See https://www.imf.org/en/Publications/CR/Issues/2023/07/24/Republic-of-Congo-Republic-of-Congo-Third-Review-under-the-Three-year-Arrangement-under-the-536899

📚 Sources & References

2014 ARTICLE IV CONSULTATION—STAFF REPORT; PRESS RELEASE AND STATEMENT BY THE EXECUTIVE DIRECTOR FOR THE REPUBLIC OF CONGO
Plan National de Développement 2018-2022
中国在刚果（布）迎来美好时代
Resource-Backed Loans: Pitfalls and Potential
Les deux chambres du Parlement ont ratifié l’accord complémentaire sur la restructuration de la dette du Congo de 1479,83 milliards de F CFA envers la Chine
N°23 RAPPORT SUR L'ACCORD COMPLEMENTAIRE SUR LA RESTRUCTURATION DE LA DETTE ENVERS LA CHINE (1) N°23
Worldbank document
Second Validation of the Republic of Congo: Final assessment by the EITI International Secretariat 3 July 2020
Republic of Congo Second Validation MSG Comments
EITI REQUIREMENT 6.2 October 2020
Initiative pour la Transparence dans les Industries Extractives - ITIE Congo June 2022
IMF Country Report No. 14/272
INITIATIVE POUR LA TRANSPARENCE DANS LES INDUSTRIES EXTRACTIVES Rapport 2017
Initiative pour la Transparence dans les Industries Extractives en République du Congo Rapport ITIE 2021 December 2023
Rapport ITIE 2015 December 2017
Rapport ITIE 2013 December 2014, 2012 EITI Report December 2013
RAPPORT DE RECONCILIATION DES PAIEMENTS ET DES RECETTES EXTRACTIVES AU TITRE L’EXERCICE 2011 October 2012
ITIE Rapport 2018
ITIE Rapport 2017
ITIE Congo Rapport 2019
ITIE Rapport 2016
ITIE en République du Congo Rapport 2022
Rapport sur la collecte initiale de données et la consultation des parties prenantes 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.

All Grantees

Government of Republic of Congo

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