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China Eximbank provides $29.75 million buyer’s credit loan for JSC Svetlogorsk Cellulose and Cardboard Factory Equipment Acquisition Project
| Funder | Export-Import Bank of China (China Eximbank) |
|---|---|
| Recipient Organization | Government of Belarus |
| Country | Belarus |
| Start Date | Jan 01, 2014 |
| End Date | Aug 21, 2029 |
| Duration | 5,711 days |
| Number of Grantees | 1 |
| Roles | Recipient |
| Data Source | AidData Chinese Aid |
| Grant ID | 66737 |
Grant Description
China Eximbank provides $29.75 million buyer’s credit loan for JSC Svetlogorsk Cellulose and Cardboard Factory Equipment Acquisition Project On September 26, 2014, China's Eximbank and the Government of Belarus signed a $29,750,000 buyer’s credit loan agreement [№ BLA201404] for the JSC Svetlogorsk Cellulose and Cardboard Factory Equipment Acquisition Project.
The loan carried an annual interest rate of 6-month LIBOR plus a 3.6% margin.
The interest rate that applies to this loan (3.93%) was calculated by taking the average 6-month LIBOR rate during the month (September 2014) when the loan agreement was finalized (0.330%) and adding a 3.6% margin.
The Government of Belarus on-lent the proceeds of the loan to a state-owned company called JSC "Svetlogorsk Pulp and Cardboard Mill" (or ОАО «Светлогорский целлюлозно-картонный комбинат» or ОАО "СветлогорскХимволокно”).
JSC "Svetlogorsk Pulp and Cardboard Mill" then used the loan proceeds to partially finance a commercial contract that it signed with China CAMC Engineering Co., Ltd. (CAMCE) — a subsidiary of Sinomach — on November 30, 2012.
The purpose of the project was to facilitate the acquisition of equipment for a bleached sulfate production facility at the cellulose and cardboard plant in the city of Svetlogorsk.
Upon completion, it was envisaged that the facility would have the capacity to produce 400,000 tons per year of bleached sulfate cellulose (used in paper and cardboard production). CAMCE was the general (EPC) contractor responsible for implementation.
On October 11th, 2010, the company signed a loan contract with a Belarus company (Светлогорский целлюлозно-картонный комбинат). The construction began in May 2013. This project was completed on December 10, 2017. However, it encountered a number of problems during and after implementation.
CAMCE allegedly violated building codes and supplied defective equipment. A strong and unpleasant odor was also reported within the vicinity of the newly constructed facility. As of 2019, the facility was not fully operational.
Consequently, JSC "Svetlogorsk Pulp and Cardboard Mill" could not fully service its debts to China Eximbank and the Ministry of Finance of Belarus had to step in and provide partial loan repayment. JSC "Svetlogorsk Pulp and Cardboard Mill" is a loss-making enterprise that has not shown a net profit since 2012.
At the beginning of 2019, the company's total debt (about $900 million) was significantly higher than the value of its fixed assets.
China Eximbank also provided a $654.1 million buyer’s credit loan to JSC "Svetlogorsk Pulp and Cardboard Mill” in 2011, which is captured in Record ID#42318.
Staff Comments
- Some official sources identify the loan commitment date as November 30, 2012, while others identify it as September 26, 2014. AidData treats September 26, 2014 as the loan commitment date because the China Eximbank loan identification number (BLA201404) is consistent with a 2014 commitment year.
- The $29.75 million China Eximbank loan that supported this project is not included in the Overseas Development Finance Dataset published by Boston University’s Global Development Policy Center in December 2020.
- For loan and debt rescheduling records with variable interest rates, AidData calculates the all-in interest rate at T0 based on the reference rate (such as LIBOR or EURIBOR) on the loan start date, plus any known margin. Please see the methodology for additional details.
Sources & References
- 白俄罗斯总理：希进一步加强白与中国机械工业集团有限公司的合作
- 宫大使应邀视察中白务实合作项目, Об утверждении перечня финансируемых за счет внешних государственных займов и внешних займов, привлеченных под гарантии Правительства Республики Беларусь, инвестиционных проектов и предназначенных для реализации таких проектов технологического оборудования и запасных частей к нему, которые при ввозе на территорию Республики Беларусь освобождаются от таможенных пошлин и налога на добавленную стоимость
- 中工国际白俄罗斯40万吨纸浆厂项目自产浆浆板顺利产出
- 中工国际工程股份有限公司计划在白俄罗斯建立生产漂白硫酸盐纸浆的工厂, Постановление Совета Министров Республики Беларусь от 18.01.2018 N 39 'О мерах по реализации организациями деревообрабатывающей и целлюлозно-бумажной промышленности инвестиционных проектов в 2018 году', ПОСТАНОВЛЕНИЕ СОВЕТА МИНИСТРОВ РЕСПУБЛИКИ БЕЛАРУСЬ, Постановление СМ РБ 204 О предоставлении гарантии Правительства Республики Беларусь Экспортно-импортному банку Китая и внесе от 11.03.2014 - Законодательство Беларуси 2021 год, Указ Президент РБ 219 28.05.2015 О внесении изменений и дополнений в Указ Президента Республики Беларусь Подробнее, Светлогорский целлюлозно-картонный комбинат — Википедия, ПОСТАНОВЛЕНИЕ СОВЕТА МИНИСТРОВ РЕСПУБЛИКИ БЕЛАРУСЬ, О предоставлении гарантии Правительства Республики Беларусь Экспортно-импортному банку Китая и внесении дополнения в постановление Совета Министров Республики Беларусь от 4 мая 2009 г. № 572
- China's Overseas Development Finance
- Belarusian annual output of 400,000 tons of bleached kraft pulp project (project management) 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.
All Grantees
Government of Belarus
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