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CET provides $79.11 million supplier's credit for Power Supply System for Addis Ababa Light Rail Transit (AA-LRT) Project (Linked to Record ID#1471 and ID#69479)
| Funder | China Electric Power Equipment and Technology Co. Ltd. (CET) |
|---|---|
| Recipient Organization | Ethiopian Railways Corporation (ERC) |
| Country | Ethiopia |
| Start Date | Dec 12, 2014 |
| End Date | Jun 02, 2031 |
| Duration | 6,016 days |
| Number of Grantees | 1 |
| Roles | Recipient |
| Data Source | AidData Chinese Aid |
| Grant ID | 69476 |
Grant Description
CET provides $79.11 million supplier's credit for Power Supply System for Addis Ababa Light Rail Transit (AA-LRT) Project On December 12, 2014, China Electric Power Equipment and Technology Co., Ltd. (CET) and the Ethiopian Railways Corporation (ERC) — an Ethiopian state-owned enterprise — signed a $74,810,622.30 (ETB 1,572,763,419) supplier's credit agreement for the Power Supply System for Addis Ababa Light Rail Transit (AA-LRT) Project.
The face value of the loan was subsequently upsized to $79.11 million.
The loan's first and last scheduled principal payment dates were June 12, 2016 and September 12, 2025, respectively. Its first and last scheduled interest payment dates were December 12, 2015 and September 12, 2025, respectively.
The borrower was expected to use the proceeds of the loan to partially finance an $85 million commercial contract between ERC and China Electric Power Equipment and Technology Co., Ltd. (CET), which is a wholly owned subsidiary of State Grid Corporation of China (SGCC).
The Government of Ethiopia’s Aid Management Platform (AMP) does not record any disbursements through under the loan agreement.
However, it does appear that the loan disbursed since Ethiopia’s Office of the Auditor General later reported that the ERC had fallen into arrears and paid $2.8 million in fines to China Eximbank for overdue loan repayments.
The purpose of the project was to provide smooth and reliable power supply to the Addis Ababa Light Rail Transit (AA-LRT).
The project involved the construction of GIS substations in the Kality, Ayat, Menelik Square, Egziabher-Ab Church, and Torhayloch areas of Addis Ababa. Of these, three are 132/15kVGIS substations and one is a 230/15kVGIS substation. The project also included the construction of three supporting facilities.
The project reached completion on June 7, 2015. The Addis Ababa light rail metro system has faced an array of operational performance and revenue generation problems. It initially began operating with 40 trains, but as of 2021, it was regularly operating with approximately 20 trains.
Addis Ababa’s deputy mayor has also noted that the city’s electrical grid lacked the capacity to power the system before construction began.
Even with its own dedicated power supply, the Addis Ababa light rail metro system still experiences power outages and delays, leading to packed cars and poor service.
Additionally, in 2021, Ethiopia’s Office of the Auditor General found that, during its first four years in operation, the Addis Ababa light rail metro system generated $11.1 million of revenue but cost $154 million to operate.
It found that the system was falling far short of its original feasibility study, which said it would pay for its construction costs within 10-years through ticket sales, advertising and renting out spaces in stations, among other methods: “[t]he feasibility study has been inadequate, and it was conducted without collecting enough information. […] This, coupled with the absence of a maintenance center to fix the trains that need repair and other factors, have contributed to the losses sustained by the light railway.”
Staff Comments
- This project is also known as the Addis Ababa Light Rail way transport power 2x15 KV air insulator switch gear line construction project and the Addis Ababa Light Rail GIS Substations Project. The Chinese project title is 埃塞俄比亚首都轻轨配套输变电工程 or 埃塞轻轨配套输变电项目.
- The system identification number for this project in the Government of Ethiopia’s Aid Management Platform (AMP) is 87143436112185.
- The Government of Ethiopia's AMP identifies the face vale of the loan as ETB 1,572,763,419. As of September 2014, 1 Ethiopian Birr (ETB) was equal to 0.049 United States Dollars (USD), which suggests that the USD face value of the loan was approximately $77,065,407.
- This China Eximbank loan was not included in the database of Chinese loan commitments that SAIS-CARI released in 2020 and re-released in 2021. Nor was it included it in the Chinese Loans to Africa (CLA) Database or the China’s Overseas Development Finance (CODF) Database — that are maintained by Boston University's Global Development Policy Center — as of August 2024.
- On June 22, 2011, China Eximbank and Ethiopian Railways Corporation (ERC) — an Ethiopian state-owned enterprise — signed a $475,000,000 (ETB 7,347,972,973) loan agreement for the Addis Ababa Light Rail Project. This loan is captured via Record ID#14716. The China Electric Power International Capacity Cooperative Enterprise Alliance indicates the value of the commercial contract between ERC and CET was about $83 million rather than $85 million.
- The loan identification number in the Government of Ethiopia’s Debt Management and Financial Analysis System (DMFAS) is 20896000 and the corresponding project name in DMFAS is ‘POWER SUPPLY FOR AA RAILWAY’. See https://www.dropbox.com/scl/fi/7nrczfanixvivmiyzqx3i/MOFED-Loan-Level-Data-on-Borrowing-Terms-and-Loan-Performance-September-2024_OTHER_PUBLIC.xlsx?rlkey=5sqhh9ii4t3x8cmz0jf6s7cod&dl=08. As of September 2024, the Government of Ethiopia recorded the loan's all-in interest rate as 8.76% in DMFAS. See https://www.dropbox.com/scl/fi/7nrczfanixvivmiyzqx3i/MOFED-Loan-Level-Data-on-Borrowing-Terms-and-Loan-Performance-September-2024_OTHER_PUBLIC.xlsx?rlkey=5sqhh9ii4t3x8cmz0jf6s7cod&dl=0
Sources & References
- Ethiopian Prime Minister Abiy Ahmed Ali Meets with Kou Wei Promoting the 'Belt and Road' Initiative and Strengthening China-Ethiopia Energy and Power Cooperation
- Company Profile
- Annual Public Sector Debt Portfolio Report For the Year 2017/18 No.19
- Supporting Power Transmission and Transformation project for Urban Light Rail in Ethiopia
- Chinese company completes light rail power project in Ethiopian capital
- Annual Public Sector Debt Portfolio Report For the Year 2017/18
- Power Supply System for Addis Ababa Light Rail Transit (AA-LRT)
- Chinese company promises reliable power supply to light rail in Ethiopia
- Chinese Company Guarantees Dependable Power Supply to Light Rail in Ethiopia
- 中国公司承建的埃塞轻轨配套输变电项目竣工
- 中电装备承建埃塞轻轨配套输变电项目竣工
- 中资工程为埃塞城市轻轨提供稳定电力保障
- 境外工程
- 国家电网中电装备公司与埃塞俄比亚财政和经济合作部签署输配电项目合作协议
- 中国公司承建的埃塞轻轨配套输变电项目竣工
- 走在一带一路 新疆送变电为中非友谊添彩
- Ethiopia
- Chinese Company Sign $119m Deal for Transmission Lines to Kenya
- Addis ABABA University School of Graduate Studies Department of Political Science and International Relations
- Chinese company completes GIS substations project of light railway in Ethiopia's capital
- Five Years On
- Addis Ababa Light Rail Still Plagued By Debt
- Light Rail Transit in Addis Ababa
- 中国电力企业 “一带一路双向投资”案例集
- MOFED Loan-Level Data on Borrowing Terms and Loan Performance September 2024_PUBLIC 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
Ethiopian Railways Corporation (ERC)
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