CDB and Standard Chartered Bank provide $1 billion syndicated loan to Sonangol to support its expansion efforts

📋 Staff Comments

1. The Chinese project title is 安哥拉石油金融有限公司银团贷款项目.
2. According to the World Bank's Debtor Reporting System (DRS), the weighted average grace period of all ‘private’ sector lending from all Chinese creditors to government and government-guaranteed borrowing institutions in Angola was 0.4116-years in 2010. AidData estimates the grace period of the China Development Bank loan that supported the Sonangol Finance Limited by using this figure. See https://www.dropbox.com/scl/fi/qi2hvg1s05nsak3n1n83u/Private-Chinese-Loans-to-Angola-November-2023-Data-Extraction.xlsx?rlkey=0aq7jdxm29ynbw4yh1bn07c7m&dl=0.
3. According to the World Bank's Debtor Reporting System (DRS), the weighted average interest rate of all ‘private’ sector lending from all Chinese creditors to government and government-guaranteed borrowing institutions in Angola was 3.9454% in 2010. AidData estimates the interest rate of the China Development Bank loan that supported the Sonangol Finance Limited by using this figure. See https://www.dropbox.com/scl/fi/qi2hvg1s05nsak3n1n83u/Private-Chinese-Loans-to-Angola-November-2023-Data-Extraction.xlsx?rlkey=0aq7jdxm29ynbw4yh1bn07c7m&dl=0.
4. A pre-export finance (PXF) facility an arrangement in which a commodity (e.g. oil) producer gets up-front cash from a customer in return for a promise to repay the customer with that commodity (possibly at a discount) in the future. PXF funds may be advanced by a lender or syndicate of lenders to a commodity producer to assist the company in meeting either its working capital needs (for example, to cover the purchase of raw materials and costs associated with processing, storage and transport) or its capital investment needs (for example, investment in plant and machinery and other elements of infrastructure). PXF facilities are usually secured by (1) an assignment of rights by the producer under an ‘offtake contract’ (i.e., a sale and purchase contract between the producer and a buyer of that producer of goods or commodities), and (2) a collection account charge over a bank account into which proceeds due to the producer from the buyer of the goods or commodities under the offtake contract are credited. There are two key documents in prepayment finance transactions: a contract providing for the advance payment by the offtaker to the producer for the purchase of goods/commodities (the 'Prepayment Contract'), and a loan agreement between a lender and the offtaker (the 'Offtaker Loan Agreement') under which the advance payment is financed.
5. The sizes of the individual contributions of China Development Bank Corporation and Standard Chartered Bank to the lending syndicate are unknown. For the time being, AidData assumes equal contributions across the two known members of the syndicate ($500,000,000).
6. The borrowings of Sonangol’s wholly-owned subsidiary, Sonangol Finance Limited (SFL), are reportedly contracted under guarantee of Sonangol, supported by oil receivables sale and purchase agreements between Sonangol and SFL.
7. The amount outstanding figures are based on an exchange rate of 1 USD: 135,988 AOA.
8. This loan is not included in the database of Chinese loan commitments that SAIS-CARI released in July 2020.

📚 Sources & References

• StanChart heralds new export era
• Chinese Loans to Africa Database
• Standard Chartered appoints structured export finance head
• Listing Particulars
• Sonangol in market for oil-backed and guaranteed lending
• Challenges and opportunities in global oil and gas finance
• 国开行陈元谈对非业务:创新金融服务促共同发展
• Relatório e Contas 2015 Consolidado
• Promotion of Economic and Trade Cooperation between China and Portuguese-Speaking Nations - US$15bn CDB Commitment
• 国家开发银行董事长陈元谈对非业务的探索和实践
• Sonangol MANAGEMENT REPORT AND CONSOLIDATED ACCOUNTS 2016
• RELATÓRIO DE GESTÃO & CONTAS CONSOLIDADAS 2017 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.