Completed Mixed AidData Chinese Aid

China Eximbank provides $31.875 million preferential buyer’s credit for Electronic Identification Card Project

$31.88M USD

Funder	Export-Import Bank of China (China Eximbank)
Recipient Organization	Government of Laos
Country	Lao People's Democratic Republic
Start Date	Jan 01, 2015
End Date	Oct 16, 2032
Duration	6,498 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`64136`

Grant Description

China Eximbank provides $31.875 million preferential buyer’s credit for Electronic Identification Card Project On March 30, 2015, the Government of Laos officially launched a $37.5 million Electronic Identification Card Project with a preferential buyer’s credit (PBC) from China Eximbank.

📋 Loan / Grant Terms

📅 Maturity19.994 years

⏳ Grace Period6.9585 years

💹 Interest Rate2%

The borrower was expected to use the loan proceeds to partially finance an EPC (commercial) with Huawei Technologies Co., Ltd.

The purpose of the project was to issue new identification cards for all Lao citizens across the country, progressively rolling out the technologically advanced cards that will replace the older ones. The project involves an ID card production center, a data collection center and 160 data supply stations.

The $37.5 million project will be implemented three phases beginning in Vientiane Capital.

The second phase will be conducted in the six provinces of Oudomxay, Luang Prabang, Xieng Khuang, Vientiane, Xaysomboun, Savannakhet and Champassak, and the third phase will be implemented in Phongsaly, Luang Namtha, Bokeo, Xayaboury, Huaphan, Borikhamxay, Khammuan, Saravan, Xekong, and Attapeu. The project was implemented in three phases.

Phase 1 targeted the capital city of Vientiane.

Phase 2 targeted the six provinces of Oudomxay, Luang Prabang, Xieng Khuang, Vientiane, Xaysomboun, Savannakhet and Champassak.

Phase 3 targeted Phongsaly, Luang Namtha, Bokeo, Xayaboury, Huaphan, Borikhamxay, Khammuan, Saravan, Xekong, and Attapeu. Huawei Technologies was the general contractor responsible for implementation. However, it hired Hongda Hi-tech Group Co Ltd as a subcontractor. The project was eventually completed, but its precise implementation end date is unknown.

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

This project is also known as the Electronic ID Project, the E-ID Project, or the the Laos National Population and Electronic Identity Card Project. The Chinese project title is 老挝电子身份证项目 or 老挝全国人口和电子身份证项目.
The precise face value of the PBC is unknown. However, since China Eximbank PBCs typically finance 85% of the total cost of a commercial (EPC) contract, AidData assumes that the face value of the PBC was $31.875 million (85% of $37.5 million).
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.
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 Laos was 19.994-years in 2015. AidData estimates the maturity of the China Eximbank loan that supported the Electronic Identification Card Project by using this figure. See https://www.dropbox.com/scl/fi/uno1hf2pjg3nfz78h72c6/Private-and-Official-Sector-PRC-Borrowings-and-Borrowing-Terms-of-Lao-PDR-September-2024.xlsx?rlkey=s7eas067aykllu1lik074l5x5&dl=05. 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 Laos was 6.9585-years in 2015. AidData estimates the grace period of the China Eximbank loan that supported the Electronic Identification Card Project by using this figure. See https://www.dropbox.com/scl/fi/uno1hf2pjg3nfz78h72c6/Private-and-Official-Sector-PRC-Borrowings-and-Borrowing-Terms-of-Lao-PDR-September-2024.xlsx?rlkey=s7eas067aykllu1lik074l5x5&dl=06. 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 Laos was 2% in 2015. AidData estimates the interest rate of the China Eximbank loan that supported the Electronic Identification Card Project by using this figure. See https://www.dropbox.com/scl/fi/uno1hf2pjg3nfz78h72c6/Private-and-Official-Sector-PRC-Borrowings-and-Borrowing-Terms-of-Lao-PDR-September-2024.xlsx?rlkey=s7eas067aykllu1lik074l5x5&dl=0

📚 Sources & References

我优买支持的老挝电子身份证项目举行发证仪式
Laos starts issuing new IDs
我优买支持的老挝电子身份证项目举行发证仪式
我优买支持的老挝电子身份证项目举行发证仪式
VO The Ministry of Public Security starts issuing new ID cards for Lao nationals across the country INTRO
Helping world with biometric tech
Hongda sees big demand for biometric ID systems
About Hongda
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访全国政协委员、鸿达高新技术集团董事长王欣
喜报
Laos starts issuing new IDs
China's Overseas Development Finance 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.