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China Eximbank provides $173.2 million preferential buyer’s credit for National Broadband Network Project
| Funder | Export-Import Bank of China (China Eximbank) |
|---|---|
| Recipient Organization | Papua New Guinea State Treasury |
| Country | Papua New Guinea |
| Start Date | Nov 01, 2014 |
| End Date | Jun 18, 2032 |
| Duration | 6,439 days |
| Number of Grantees | 1 |
| Roles | Recipient |
| Data Source | AidData Chinese Aid |
| Grant ID | 61230 |
Grant Description
China Eximbank provides $173.2 million preferential buyer’s credit for National Broadband Network Project In November 2014, China Eximbank and the Ministry of Treasury of the Government of Papua New Guinea signed a $173,240,000 preferential buyer’s credit (PBC) agreement for the National Broadband Network Project.
The borrowing terms of the PBC are unknown.
However, it is known that the Ministry of Treasury of the Government of Papua New Guinea on-lent the proceeds of the PBC to Kumul Consolidated Holdings (a PNG state-owned enterprise, formerly known as Independent Public Business Corporation (IPBC).
The ultimate borrower (Kumul Consolidated Holdings) was to use the proceeds of the PBC to partially finance a commercial contract worth $203 million that Telikom PNG Ltd — a state-owned telecommunications company in Papua New Guinea (PNG) — signed with Huawei Technologies Co., Ltd. on July 3, 2013.
The purpose of the project was to construct a backbone for new fixed and mobile broadband services across the country and thereby provide new services, such as e-health, e-education, digital TV, and e-government applications.
The project was to be implemented in two phases: Phase 1 was to involve core network modernization activities, fixed broadband rollout activities, and the establishment 3G and 4G mobile networks to cover 121 sites in Port Moresby and Lae (through the installation of hundreds of telecommunication towers).
Phase 2 was to involve an expansion of the country’s tower infrastructure (bringing total network capacity to 949 towers across PNG) and an upgrading of the existing network to 4.5G in major towns and cities. Phase 1 commenced in June 2015.
However, as of of 2021, many of the telecommunication towers that were installed during Phase 1 have broken down and Telikom PNG Ltd was reportedly unable to repair and maintain these assets because of its need to pay down debts to China Eximbank. Consequently Phase 2 was put on hold.
Staff Comments
- This project is also known as the NBN1 3/4G Project and the National Broadband Project. The Chinese project title is 巴布亚新几内亚国家宽带网络项目 or 国家宽带网项目.
- The China Eximbank loan that supported this project is not included in the Overseas Development Finance Dataset that Boston University’s Global Development Policy Center published in December 2020.
- This record has been marked as having evidence of financial distress because it was part of the debt restructuring agreement captured in record #95853.
Sources & References
- PAPUA NEW GUINEA REPORT ON GOVERNMENT FINANCE STATISTICS MISSION, 2014 ANNUAL PUBLIC INVESTMENT PROGRAM IMPLEMENTATION REPORT, 2019 BUDGET ESTIMATES FOR STATUTORY AUTHORITIES PROVINCIAL GOVERNMENTS DEBT SERVICES AND TRUST ACCOUNTS
- PNG and China Exim Bank Look to Break Ground on New Projects – Water Treatment and Broadband Internet
- PNG CDB.pdf
- Telikom Papua New Guinea rings the changes
- 巴新奥尼尔总理会见到访的中国进出口银行李若谷行长
- 电信篇
- Telikom PNG and Huawei sign National Broadband Network contract 2013.07.03
- About Us Kumul Consolidated Holdings (KCH)
- The Report: Papua New Guinea 2014
- China's Belt and Road Vision: Geoeconomics and Geopolitics
- Kumul Consolidated Holdings Annual Review
- Kumul Consolidated Holdings Annual report 2018
- Huawei preferred comms equipment vendor, says Muthuvel
- China's Overseas Development Finance
- Muthuvel aims to lift standard
- Papua New Guinea and China’s Debt Squeeze
- Network project nearly finished
- TELIKOM PNG CHAIRMAN'S UPDATE ON TELIKOM INVESTING IN FUTUTRE TECHNOLOGIES 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.
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Papua New Guinea State Treasury
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