Active Mixed AidData Chinese Aid

China Eximbank provides $239.3 million preferential buyer's credit for MaryAzot Production Association Plant Reconstruction Project (Linked to Record ID#69498, #40330)

$239.36M USD

Funder	Export-Import Bank of China (China Eximbank)
Recipient Organization	Central Bank of Turkmenistan
Country	Turkmenistan
Start Date	Nov 03, 2007
End Date	Apr 12, 2026
Duration	6,735 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`69497`

Grant Description

China Eximbank provides $239.3 million preferential buyer's credit for MaryAzot Production Association Plant Reconstruction Project On August 22, 2006, the Export-Import Bank of China signed a $300 million preferential buyer's credit (PBC) framework agreement with the Government of Turkmenistan, which is captured via Record ID#40330).

📋 Loan / Grant Terms

💹 Interest Rate3.0%

The commercial contract was to be financed through the $300 million preferential buyer's credit framework agreement.

On November 3-4, 2007, China Eximbank and the Government Turkmenistan signed for two subsidiary loan (PBC) agreements with the same borrowing terms that were specified in the August 2006 framework agreement: a $60,642,000 loan (PBC) was issued for the construction of the Ashgabat Glass Factory, a glass-manufacturing plant (as captured via Record ID#69498) and a $239,358,000 loan (PBC) was issued for the construction of new facilities and reconstruction of MaryAzot Production Association (as captured via Record ID#69497).

As a source of de facto collateral, the Central Bank of Turkmenistan agreed to maintain a $50 million cash balance in an escrow account accessible to the lender.

These funds were drawn from the State Fund for Development of the Oil and Gas Industry and Mineral Resources of Turkmenistan.

The project consisted of a reconstruction of the MaryAzot Production Association and the construction of a carbamide plant with a planned capacity of 400,000 tons in the town of Mary.

China Eximbank's loan constituted 90% of the financing necessary for the $266 million reconstruction project, while Turkmendokun joint-stock company covered the remaining 10%. CITIC International was responsible for implementing the project. However, it is unclear if the project ever reached completion.

📋 Staff Comments

The Chinese title of the project is 土库曼斯坦玻璃厂建设项目.
The entire project was reported to cost $67.38 million, so there were likely financiers other than China Eximbank. This issue warrants further investigation.
Data on amounts outstanding can be accessed via https://tfeb.gov.tm/web/upload/global/2110%20SBFEA_2019_%28eng%29_signed%20%281%29.pdf and https://tfeb.gov.tm/web/upload/global/en%202012.pdf and https://tfeb.gov.tm/web/upload/global/TVEB_eng_2013_final.pdf and https://www.tfeb.gov.tm/page/414. According to the World Bank's Debtor Reporting System (DRS), the weighted average grace period of all official sector lending from all Chinese creditors to government and government-guaranteed borrowing institutions in Turkmenistan was 4.7-years in 2007. AidData estimates the grace period of the China Eximbank loan by using this figure. See https://www.dropbox.com/scl/fi/k9rnqdib5fdz2vv9fjc4k/August-2024-IDS-Download-Turkmenistan-s-Borrowings-and-Borrowing-Terms-from-Official-Sector-PRC-Creditors.xlsx?rlkey=l952qne9jm8bstvvf6ub9ybiq&dl=0

📚 Sources & References

Turkmenistan gets $300 mln loan from Chinese bank
土库曼斯坦与中国签订尿素建设合同
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Turkmenistan - Retrospective of the 30th Anniversary of China's Opening to the Outside World
土库曼斯坦--中国对外开放30周年回顾展
State Bank for Foreign Economic Affairs of Turkmenistan Financial Statements for the year ended December 31, 2019
August 2024 IDS Download -- Turkmenistan's Borrowings and Borrowing Terms from Official Sector PRC Creditors 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.