[China Co-financing Fund] IDB administers $50 million CHC loan to DP World Posorja for Phase I Posorja Port Terminal

[China Co-financing Fund] IDB administers $50 million CHC loan to DP World Posorja for Phase I Posorja Port Terminal On November 12, 2018, IDB Invest, the private sector institution of the Inter-American Development Bank Group (formerly known as the IIC) signed a loan package for 377 million USD DP World Posorja, a subsidiary of Dubai Ports World, for the first phase of the construction, operation, and maintenance of the Posorja Port Project in Ecuador.

This loan consists of USD 50 million from the China Co-financing Fund for Latin America and the Caribbean (CHC), USD 147 million loan from the IDB itself, and the mobilization of USD 180 million in resources from other investors, including KfW DEG, a German financial institution and subsidiary of KfW; and Proparco, a French development finance institution.

The IDB approval date for this loan financing was May 1, 2018, and it refers to this project with code 12177-01 and name "Posorja Port." The total investment of the first phase was estimated at USD 538 million as of April 26, 2019. The total cost of the project is expected to be USD 1.2 billion USD.

The Guayaquil Port Authority (APG) helped with implementation of the project, and China Harbor Engineering Company (CHEC) was one of the major project contractors.

This deepwater port is a public private partnership (PPP) project, for which DP World Posorja received a 50-year concessionaire contract in May 2016.

The port is located on the Guayas River, about 65 km from Guayaquil, and is expected to have a 750,000 TEU annual capacity. Construction for Phase I of the project began in July 2016.

The port began operations in August 2019, though the final part of the first phase was finished in May 2020 with the arrival of four additional cranes.

This first phase included, among other things, the creation of a 20 km service road to allow access to and from the port; the development of a multi-purpose terminal with 4 Quay Cranes, 15 rubber tyred gantry (RTGs), and a 400-meter pier; and the dredging of a deepwater access channel, 33.8 kilometers long (21 nautical miles), 16.5 meters deep, and 175 meters wide.

This is the first deepwater port in Ecuador, intended to allow Post Panamax type vessels to maximize their cargo capacity. The port will additionally serve Neo Panamax and Triple E Class ships.

The project's second phase is expected to consist of the development of a Special Economic Zone adjacent to the port, including a 1 square km logistics and industrial park. The project faced some challenges during construction.

On February 15th, 2019 a judge ruled in favor of a lawsuit against the Environmental Ministry for not completing with all of their duties when giving an environmental license for the project. As a result, the old environmental license was annulled.

In addition, the project had problems of corruption, including funds going missing and criminal charges against officials from DP World for false testimony and perjury.

The China Co-Financing Fund was established on 14 January 2013 with a contribution of 2 billion USD by the People's Bank of China, and it is administered by the IDB. For more information, see umbrella Record ID#86526.