Completed Mixed AidData Chinese Aid

China Eximbank provides RMB 292 million government concessional loan for Purchasing Dredgers and Supporting Vessels Project (Linked to Record ID#98029, 96221)

¥292M RMB

Funder	Export-Import Bank of China (China Eximbank)
Recipient Organization	Myanmar Foreign Trade Bank (MFTB)
Country	Myanmar
Start Date	May 27, 2011
End Date	Jan 03, 2030
Duration	6,796 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`64444`

Grant Description

China Eximbank provides RMB 292 million government concessional loan for Purchasing Dredgers and Supporting Vessels Project On May 27, 2011, China Eximbank and Myanmar Foreign Trade Bank (MFTB) signed an RMB 292 million government concessional loan (GCL) agreement for the Purchasing Dredgers and Supporting Vessels Project.

The borrowing terms of the GCL are unknown.

However, it is known that the borrower was to use the GCL proceeds to finance a $40 million commercial contract that China National Aero-Technology Import & Export Corporation (CATIC) and Myanmar’s Ministry of Transportation signed on December 13, 2010.

The purpose of the project was to facilitate the acquisition of 19 dredgers and auxiliary vessels by the Ministry of Transportation of Myanmar.

CATIC began building the watercraft – including five cutter suction dredgers, two backhoe dredgers, four split hopper barges, a tug boat, a landing craft and six aid vessels – in December 2011. It completed the construction of the watercraft in June 2013. One batch of the dredgers and vessels arrived in Yangon on July 20, 2013 and another arrived in August 2013.

A project completion ceremony took place on September 14, 2013.

There are some indications that the China Eximbank loan for the Purchasing Dredgers and Supporting Vessels 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

AidData assumes that the government concessional loan covered 100% of the commercial contract value (per China Eximbank policy regarding government concessional loans).
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 Myanmar was 15.0477-years in 2011. AidData estimates the maturity of the China Eximbank loan that supported the Purchasing Dredgers and Supporting Vessels 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 4. 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 5.7977-years in 2011. AidData estimates the grace period of the China Eximbank loan that supported the Purchasing Dredgers and Supporting Vessels 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 interest rate of all official sector lending from Chinese creditors to government and government-guaranteed borrowing institutions in Myanmar was 4.6293% in 2011. AidData estimates the interest rate of the China Eximbank loan that supported the Purchasing Dredgers and Supporting Vessels Project by using this figure. See https://www.dropbox.com/s/ab8qt4n6jijcbhd/IDS_Average%20interest%20on%20new%20external%20debt%20commitments.xlsx?dl=06. This project is also known as the 19 Purchasing Dredgers and Supporting Vessels Project. The Burmese project title is ေသာင္တူးေရယာဥ္၀ယ္ယူေရး.

📚 Sources & References

Dredging tests begin on Ayeyarwady River
驻缅甸大使杨厚兰出席挖泥船交接仪式
Department buys dredging vessels from Chinese firm
驻缅甸大使杨厚兰在挖泥船项目交接仪式上的讲话
China Aviation Technology Beijing Co.
Ltd. delivered 19 dredgers and auxiliary vessels in Myanmar
The New Light of Myanmar
Volume XIX
Number 39
Modern China-Myanmar Relations Dilemma of Mutual Dependence
New dredgers arrive from China
Over $ 3 billion and nearly 2 billion yuan in loans from China in four years
Between 2006 and 2011
Myanmar received more than US $ 3 billion in loans from China and nearly two billion Chinese yuan in loans, the largest amount in the power and energy sectors.
Disclosure of 20 Chinese loans from 2006-2011 by Ministry of National Planning and Economic
The New Light of Myanmar Volume XVIII
Number 237
China Overseas Development Finance
Chinese Company Hands Over 19 Dredgers to Myanmar
Chinese Company Hands Over 19 Dredgers to Myanmar 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.