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China Eximbank provides government concessional loan for MA60 Aircraft Acquisition Project (Linked to Record ID#33807)
| Funder | Export-Import Bank of China (China Eximbank) |
|---|---|
| Recipient Organization | Government of Laos |
| Country | Lao People's Democratic Republic |
| Start Date | Jan 01, 2006 |
| End Date | Jul 09, 2028 |
| Duration | 8,225 days |
| Number of Grantees | 1 |
| Roles | Recipient |
| Data Source | AidData Chinese Aid |
| Grant ID | 62569 |
Grant Description
China Eximbank provides government concessional loan for MA60 Aircraft Acquisition Project In 2006, China Eximbank and the Government of Laos signed a government concessional loan (GCL) agreement for the MA60 Aircraft Acquisition Project.
However, it is known that the borrower used to loan proceeds to finance a commercial contract between Lao Airlines and Xi'an Aircraft Industrial Corporation (XAC), which was signed in December 2005. The purpose of the project was to purchase two MA60 aircraft. XAC was the contractor responsible for implementation.
The two aircraft purchased by Lao Airlines arrived at Vientiane Wattay International Airport on August 4, 2006 and September 28, 2006.
On April 28, 2007, Lao Airlines held a nine-month celebration of the safe operation of the aircraft at the Vientiane Wattay International Airport. Lao Airlines President Song Fan attended the celebration.
There are multiple indications that the China Eximbank loan for this project may have financially underperformed vis-a-vis the original expectations of the lender. In 2020, the Laotian authorities urgently sought debt relief from China Eximbank.
At that time, the gross reserves of the Bank of Laos stood at only 1.5 months of import cover and credit rating agencies warned of a high default probability.
In 2020, China Eximbank also agreed to reprofile multiple loan agreements that it had previously signed with the Government of Laos (as captured via Record ID#96464).
These debt service payment deferrals lasted for approximately 4-years (2020 and 2023) and provided approximately $1.892 billion of cash flow relief ($1.422 billion in deferred principal payments and $470 million in deferred interest payments). Deferred principal and interest repayments in 2020 were worth $202 million.
Deferred principal and interest payments were worth $426 million in 2021. Deferred principal and interest payments were worth $594 million in 2022. Deferred principal and interest payments were worth $670 million in 2023.
Staff Comments
- The Chinese project title is 老挝新舟60飞机.
- According to China’s Ministry of Commerce, a foreign aid loan (also known as a government concessional loan) was issued in support of this project in 2006. Each MA60 costs approximately $11 million. Therefore, in the absence of the actual face value of the loan, AidData imputes a face value of $22 million. This issue merits further investigation.
- The Chinese Government provided a grant for the acquisition of two additional MA60 aircraft in 2013 (as captured via Record ID#33807).
Sources & References
- Laos
- China boost trade and investment cooperation
- 中国驻老挝大使潘广学接受中央电视台《援外纪实》节目采访
- 中国新舟600飞机出口两架老挝国防部
- 老挝航空公司购买的新舟60飞机首航成功(图)
- Laotian customers loyal to the MA60 turboprop
- Xian MA60
- Defeat
- Not Merely Compete: China's View of Its Military Aerospace Goals and Requirements in Relation to the United States, 2006年中国对外援助基本情况 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 Laos
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