CMEC restructures 2005 supplier’s credit for Power Transmission Network Associated with the Imboulou Hydropower Plant Project (Linked to Record ID#1049)

On December 19, 2005, China Machinery Engineering Corporation (CMEC) and the Government of the Republic of Congo signed a supplier’s credit agreement worth $551,507,000 (or approximately worth CFA 321.7 billion) for the Power Transmission Network Associated with the Imboulou Hydropower Plant Project.

The proceeds of the supplier’s credit were to be used by the borrower to finance 85% of the cost of its $648,832,000 commercial contract with CMEC. The Republic of Congo agreed to cover the remaining 15% of the commercial contract cost ($97,325,000) itself.

Over the lifetime of the supplier’s credit, the Republic of Congo agreed to repay $557,849,330.50 in principal and interest. Then, on January 18, 2006, the supplier’s credit agreement was modified (in particular, Articles 6, 8, and 13).

The project execution period was reduced from 5-years to 3.5-years and additional changes were introduced related to the name of the lender; the credit conditions; loan repayment and amortization table; the duration, validity, and termination of the credit; and the conditions of entry into force of the credit.

Then, on April 13, 2018, CMEC and the Republic of Congo signed another supplier’s credit agreement modification to reschedule the repayment terms.

As such, the rescheduling agreement effectively increased the grace period of the supplier’s credit by an additional 3-years (from June 2018 to June 2021).

After the restructuring of this loan, the net present value of total repayments to CMEC fell from $331,557,351.05 37 (before restructuring) to $274,445,470 (after restructuring). This increase represented a 17.2% reduction in net present value terms. As of April 13, 2018, the borrower had already repaid $207,876,503.54.

Under the terms of the rescheduling agreement, the borrower was responsible for making a $25,249,617 repayment (24,901,003 in principal and $348,614 in interest) on June 1, 2021 and a $25,224,716 repayment ($24,901,003 in principal and $323,713 in interest) on December 1, 2021. However, according to the Republic of Congo's Ministry of Finance, neither of these repayments were made.

Therefore, by the end of calendar year 2021, the Republic of Congo had approximately $50 million of principal and interest arrears to CMEC.

This project sought to build upon the CMEC-financed 120MW Imboulou Hydropower Plant Project (as captured via Record ID#434).

It involved connecting the Imboulou Hydropower Plant with several small power stations to construct a “major power channel” (or “energy boulevard”) between the cities of Pointe-Noire, Brazzaville and Ouésso.

More specifically, it supported the construction of a load dispatching center (“redistribution center”); the construction and rehabilitation of 220kv transmission lines and very high voltage transformer plants between Brazzaville and Pointe-Noire (passing through Mindouli and Loudima); the construction of seven 220 KV and 110 KV high-voltage power stations in Djiri, Ngo, Gamboma, Oyo, Boundji, Owando and Djambala (including a 220kV Imboulou-Ngo segment, a 220kV Ngo-Brazzaville segment; a 220kV Ngo-Gamboma segment, a 220kV Oyo-Owando segment, and a 110kV Ngo-Djambala-Oyo-Boundji segment); the construction of underground 220kV transmission line in Tsiélampo; the construction of nine 30kV aerial lines measuring 242 km in length (including an Imboulou-Inoni-Mpoumako-Imvouba segment, an Inoni-Inoni2-Mbouambé-Léfini segment, an Imboulou-Mbé-Ngabé segment, and an Imboulou-Mpouya segment); the construction of four 20kV underground transmission lines to evacuate power from the Imboulou Hydroelectric Power Plant to the capital city of Brazzaville; and the construction of nine additional 220 kV and 110 kV high voltage lines (measuring 841 km in length).

In total, the project sought to create a 1,588 km national electricity transmission network CMEC was the contractor responsible for implementation. Construction started on May 28, 2009, and the project was completed on May 23, 2012.

Record ID#1049 captures the original 2005 supplier’s credit and Record ID#73614 captures the 2018 debt rescheduling agreement.