Chinese Government approves first tranche of funding under $20 billion resource-backed loan framework agreement worth $1.3 billion (Linked to Record ID#64352)

Chinese Government approves first tranche of funding under $20 billion resource-backed loan framework agreement worth $1.3 billion On September 5, 2017, the Chinese Government and the Republic of Guinea signed a $20 billion loan framework agreement (also called the Resource and Loan Cooperation Framework Agreement or 中几资源换贷款战略合作 or 中几资源换贷款合作框架 or 资源换贷款 or Accord Cadre de Financement des Projets d’Infrastructures Prioritaires).

The purpose of this 20-year agreement (2017-2036) is to finance infrastructure projects and it is backed by future revenues from mining projects.

All principal interest payments will be deposited in an escrow account.

ICBC will serve as the lead lender but other Chinese banks (including China Eximbank) may contribute to any given subsidiary loan.

The Chinese Government approved the first tranche of funding worth approximately $1.3 billion (captured in Record ID#65113) under the loan framework agreement to support five different development projects: 1) RN1 Coyah-Mamou-Dabola Reconstruction Project (see Record ID#65115), 2) the Conakry Urban Road Project (see Record ID#65116), 3) the Lisan-Fomi-Kankan Electricity Transmission Line Project (see Record ID#64408), 4) the Regional University Extension and Rehabilitation Project (see Record ID#64383), and 5) the Conakry Port Extension Project (see Record ID#52260).

Under the terms of the $20 billion loan framework agreement, the Republic of Guinea also granted bauxite mining concessions to 3 Chinese companies: State Power Investment Corporation (SPIC), Aluminum Corporation of China Ltd. (Chinalco), and China Henan International Cooperation Group.

Aluminium Corp of China (Chalco) agreed to pursue the Boffa Bauxite Mining Project (also known as the Boffa Sud and Boffa Nord Blocks Project or Projet Boffa de Chalco or 中铝几内亚铝土矿矿山项目 or 几内亚铝土矿矿山项目 or 中国铝业首个海外大型铝项目 or 几内亚Boffa铝土矿项目); SPIC agreed to pursue Alumina Mining Project (also known as 国家电投几内亚铝业开发项目 and Project d'Exploitation D'Alumine De SPIC En Guinée); and China Henan International Cooperation Group agreed to pursue a third Bauxite Mining Project.

The revenues from these 3 mining operations will be used to facilitate the repayment of the subsidiary loans issued through the framework agreement.

According to a Ministry of Mines ITIE Report published in 2020, repayment of loans made under the agreement will be guaranteed by the mineral resources and other revenues relating to mineral rights granted to the Chinese companies.

Chalco’s Boffa Bauxite Mining Project was formally launched on October 28, 2018 and the mine went into operation on April 6, 2020. A groundbreaking ceremony for SPIC’s Alumina Mining Project took place on May 29, 2019.