China Eximbank provides $46.2 million preferential buyer's credit for Cao Bang Iron and Steel Complex Construction Project

China Eximbank provides $46.2 million preferential buyer's credit for Cao Bang Iron and Steel Complex Construction Project On June 16, 2009, the Prime Minister of Vietnam approved a $46.2 million preferential buyer’s credit (PBC) from China Eximbank for the Cao Bang Iron and Steel Complex Construction Project.

It appears that the Government of Vietnam contracted this loan and then on-lent the loan proceeds to the Cao Bằng Iron and Steel Joint-Stock Company. Bank for Investment and Development of Vietnam (BIDV) also provided a VND 562 billion loan for this project.

The purpose of the project was to construct an industrial complex housing four main factories for iron and steel development in Cao Bằng province with 220,000 tons-per-year of production capacity. The total project cost was over VND 1.9 trillion (about $100 million).

Cao Bằng Iron and Steel Joint-Stock Company used the loan proceeds to partially finance an EPC contract signed in November 2009 with China National Complete Plant Import Export Corporation (Complant). Construction began in April 2010 and the project was originally expected to reach completion at the end of 2011.

However, Cao Bằng Iron and Steel Joint-Stock Company and China Eximbank were reportedly displeased with the performance of Complant.

China Eximbank eventually asked Cao Bằng Iron and Steel Joint-Stock Company to find an alternative general EPC contractor with appropriate expertise.

Cao Bằng Iron and Steel Joint-Stock Company signed a new EPC contract on January 27, 2011 with China CMIIC Engineering & Construction Corporation — also known as China Machinery Industry Construction Group Inc. (SINOCONST).

SINOCONST commenced work in 2012 and quickly completed all of the remaining construction activities and technical requirements (including environmental standards).

The iron and steel factory went into production on October 13, 2015 and the first steel billet was produced on October 29, 2015. A project completion ceremony took place on May 19, 2016.