Completed Mixed AidData Chinese Aid

CGGC provides RMB 2.8577 billion supplier’s credit for Malabo Sewage Treatment Plant and Sewage Pipe Network Project

¥2.86M RMB

Funder	Export-Import Bank of China (China Eximbank)
Recipient Organization	Government of Equatorial Guinea
Country	Equatorial Guinea
Start Date	Jan 01, 2009
End Date	Jul 15, 2026
Duration	6,404 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`62256`

Grant Description

CGGC provides RMB 2.8577 billion supplier’s credit for Malabo Sewage Treatment Plant and Sewage Pipe Network Project In 2009, China Gezhouba Group Corporation (CGGC) and the Government of Equatorial Guinea signed a supplier’s credit agreement for the Malabo Sewage Treatment Project. The estimated value of the supplier’s credit (loan) is RMB 2.8577 billion (EUR 270.3 million).

In order to finance its supplier’s credit agreement with the Government of Equatorial Guinea, CGGC secured one or more export seller’s credits from China Eximbank.

The proceeds of the supplier’s credit were to be used by the borrower to finance approximately 85% of the cost of an RMB 3.362 billion (EUR 318 million) commercial (EPC) contract between the Government of Equatorial Guinea and CGGC, which was signed on February 24, 2008.

📋 Loan / Grant Terms

💰 Loan Amountare unknown

However, it is known that the supplier’s credit was backed by a Sinosure credit insurance policy, which was finalized in September 2013 and provided $119 million of coverage.

The project involved the (1) the construction of a sewage treatment plant in Malabo (with the capacity of 40,000 cubic meters of sewage and the ability to treat and discharge 10,000-14,000 cubic meters of sewage per day), and (2) construction of a 238 km (or 239.5 km) network of sewage pipes in Malabo.

These two project components are known as Phase 1 and Phase 2, respectively. The project also involved the installation of 5 sewage pumping stations. However, it is unclear if this component was undertaken as part of Phase 1 or Phase 2. Upon completion, this project was expected to benefit 100,000 local residents of Malabo.

CGGC was the general EPC contractor responsible for project implementation.

However, Long Jian Road and Bridge Co., Ltd., SCEGC Installation Group Company Ltd., CMEC Comtrans International Co., Ltd., and Anhu Shui'an Construction Group Co., Ltd. were also involved in implementation. Phase 1 took place between August 18, 2008 and August 2012. Phase 2 commenced on June 13, 2013.

The Malabo sewage treatment plant and sewage pipe network entered its trial operation period on October 8, 2015. It was officially handed over to the local authorities in 2019.

The Malabo sewage treatment plant and sewage pipe network reportedly now collects 14,000 cubic meters of municipal sewage each day (on average) and provide 85% to 90% of the city’s sewage treatment capacity. However, this project also faced significant implementation and debt repayment challenges.

Sinosure made an EUR 6.53 million indemnity payment to CGGC in December 2014 due to the fact that the Government of Equatorial Guinea defaulted on its payment obligations to CGGC. Then, in September 2017, Sinosure made another EUR 3.25 million indemnity payment to CGGC for the same reason.

📋 Staff Comments

This project is also known as the Malabo Wastewater and Rainwater Treatment Plant Project and the Malabo City Sewage Pipe Network and Sewage Treatment Plant Projec. The Chinese project title is 都马拉博城市污水管网与污水处理厂项目 or 马拉博城市污水管网与污水处理厂项目 or 赤道几内亚马拉博城市污水管网及污水处理厂工程 or 赤道几内亚马拉博市污水和雨水处理及管网系统工程 or 赤道几内亚马拉博城市污水管网工程 or 赤道几内亚马拉博城市污水管网及处理厂项目. The Spanish project title is Construccion del sistema de red de canalizacion y tratamiento de aguas residuales y pluviales de la Ciudad de Malabo or Proyecto de Construccion del sistema de red de canalizacion y tratamiento de aguas residuales y pluviales de la Ciudad de Malabo.
SAIS-CARI and Boston University’s Global Development Policy Center record a $132 million (RMB 900 million) supplier’s credit from CGGC for this project. However, given that the project was implemented in two phases and the total cost of the commercial contract for both phases was RMB 2.8577 billion (EUR 270.3 million), their estimate appears to only capture the financial commitment for phase 1 (which is also recorded by China Eximbank as RMB 900 million). This source (https://www.dropbox.com/s/vtf55ft7x7qetik/%E6%94%BF%E7%AD%96%E6%80%A7%E9%93%B6%E8%A1%8C%E6%94%B9%E9%9D%A9%E7%9A%84%E4%B8%BB%E8%A6%81%E6%96%B9%E5%90%91%28%E6%94%BF%E7%AD%96%E6%80%A7%E9%93%B6%E8%A1%8C%E5%92%8C%E5%95%86%E4%B8%9A%E9%93%B6%E8%A1%8C%E7%9A%84%E4%B8%BB%E8%A6%81%E8%81%94%E7%B3%BB%29-%E6%96%B0%E4%BB%94seo.pdf?dl=0) indicates that China Eximbank supported the project’s first phase and second phase.
In June 2012, the Government of Equatorial Guinea and CGGC signed a commercial contract for Phase 2 (involving the construction of 238 km of sewage pipes in Malabo). It is unclear if this contract represents an amendment of the February 24, 2008. This issue warrants additional investigation.
In September 2013, CGGC purchased a $119 million credit insurance policy from Sinosure in support of the June 2012 contract that it signed for Phase 2.

📚 Sources & References

中国进出口银行绿色金融白皮书 2016 White Paper on Green Finance The Export-Import Bank of China
La cooperación sino-ecuatoguineana en mis ojos(2018-04-08)
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