Completed Mixed AidData Chinese Aid

China Eximbank provides preferential buyer’s credit for Railroad Equipment Procurement Project (Linked to Record ID#67566, 96221, 98029)

Funder	Export-Import Bank of China (China Eximbank)
Recipient Organization	Government of Myanmar (Burma)
Country	Myanmar
Start Date	Dec 11, 2007
End Date	Jun 27, 2032
Duration	8,965 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`63667`

Grant Description

China Eximbank provides preferential buyer’s credit for Railroad Equipment Procurement Project On December 11, 2007, the Export-Import Bank of China, the Central Bank of Myanmar, and Myanmar Foreign Trade Bank signed a preferential buyer’s credit (PBC) agreement for the Railroad Equipment Procurement Project.

The face value and borrowing terms of the PBC are unknown. However, it is known that Sinosure provided buyer’s credit insurance. The purpose of the project was to facilitate the acquisition of railroad equipment (20 locomotives).

China National Machinery Import and Export Group (CMC) and Yunnan Machinery and Equipment Import and Export Co., Ltd. (YMEC) were the contractors responsible for implementation of the project. The first batch of 8 locomotives arrived in Yangon on November 2, 2008. The project was ultimately completed on March 15, 2009.

There are some indications that the China Eximbank loan for the Railroad Equipment Procurement Project may have financially underperformed vis-a-vis the original expectations of the lender.

In 2020, China Eximbank and the Government of Myanmar signed a debt suspension agreement as part of the G-20 Debt Service Suspension Initiative (DSSI).

Under the terms of the agreement, the lender agreed to suspend principal and interest payments due between May 1, 2020 and December 31, 2020 under 3 buyer’s credit loan (BCL) agreements, 6 government concessional loan (GCL) agreements, and 27 preferential buyer’s credit (PBC) agreements (as captured via Record ID#98029).

Debt service payments under many of these loan agreements were again deferred in 2021 (as captured via Record ID#96221).

📋 Staff Comments

The Chinese project title is 出口缅甸钢轨业务.
The PBC that supported this project may have also supported a Hydro-Generator Manufacturing Plant Construction Project (captured via Project ID#67566).
This China Eximbank loan is not included in the Overseas Development Finance Dataset that Boston University’s Global Development Policy Center published in December 2020.
According to the World Bank's Debtor Reporting System (DRS), the weighted average maturity of all official sector lending from Chinese creditors to government and government-guaranteed borrowing institutions in Myanmar was 14.5376-years in 2007. AidData estimates the maturity of the China Eximbank loan that supported the Railroad Equipment Procurement Project by using this figure. See https://www.dropbox.com/s/949n5rctiue6d7c/IDS_Average_grace_period_and_maturity_on_new_external_debt_commitments.xlsx?dl=0 5. According to the World Bank's Debtor Reporting System (DRS), the weighted average grace period of all official sector lending from Chinese creditors to government and government-guaranteed borrowing institutions in Myanmar was 5.56-years in 2007. AidData estimates the grace period of the China Eximbank loan that supported the Railroad Equipment Procurement Project by using this figure. See https://www.dropbox.com/s/949n5rctiue6d7c/IDS_Average_grace_period_and_maturity_on_new_external_debt_commitments.xlsx?dl=0 6. According to the World Bank's Debtor Reporting System (DRS), the weighted average interest rate of all official sector lending from Chinese creditors to government and government-guaranteed borrowing institutions in Myanmar was 2.8812% in 2007. AidData estimates the interest rate of the China Eximbank loan that supported the Railroad Equipment Procurement Project by using this figure. See https://www.dropbox.com/s/ab8qt4n6jijcbhd/IDS_Average%20interest%20on%20new%20external%20debt%20commitments.xlsx?dl=0

📚 Sources & References

中机公司出口缅甸钢轨业务首批货物顺利发运
中机公司出口缅甸钢轨项目及水轮发电机制造厂项目正式启动
China's Overseas Development Finance
Brief Introduction of UREC
Export of complete sets of equipment over the years and domestic and overseas contracted projects
Locomotives bought from PRC handed over to MRT
The delivery ceremony of our company’s 20 diesel locomotives exported to Myanmar was held in Yangon
Overseas and Domestic Projects 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.