China Eximbank provides RMB 443.7 million government concessional loan for Bingu National Stadium Construction Project (Linked to Record ID#57896)

China Eximbank provides RMB 443.7 million government concessional loan for Bingu National Stadium Construction Project In 2009, China Eximbank agreed in principle to issue a loan to Malawi towards construction of a modern national stadium, the Bingu National Stadium.

Then, on January 30, 2013, China Eximbank and the Government of Malawi signed a government concessional loan (GCL) agreement [CHINA EXIMBANK GCL NO. (2013) 16 TOTAL NO. (461)A] worth RMB 443,788,000 for the Malawi National Stadium Construction Project. The loan agreement was then amended on May 17, 2013.

The loan's principal amount outstanding was RMB 392,581,692.30 as of June 2023. As of 2022, the borrower expected to make principal repayments each year worth RMB 34,137,538.46 until 2033. The purpose of the project was to construct Bingu National Stadium. The stadium has a seating capacity of 40,000 people, a standard natural grass football area, and 10 synthetic tracks.

It has two major areas, the larger being the reinforced-concrete stands, surrounded by a vast, circular promenade.

The seating bowl has two tiers along the west and east sides, divided by single strips of private boxes, 60 in total (2 presidential, 2 diplomatic and 56 other).The second part is its vast roof, which has a height of 56 meters.

Beneath the roof there's room for all FIFA-required facilities as well as offices, a medical center, police station, and two tanks holding up to 20,000 liters of rainfall water.

Spaces include two VVIP and two VIP lounges; four dressing rooms; two referee rooms; five event management rooms, and three management rooms.

There are also eight shopping spaces, two lifts for VVIPs, 800 toilets, and a 400-car parking space among other facilities.

Planning for the national stadium was tied up in debates of where to locate the stadium, as there was a move to change its location from Lilongwe to Blantyre to redistribute aid projects away from the capital. However, Lilongwe was ultimately selected as the site of the stadium after the election of President Joyce Banda.

More specifically, the stadium is located in Area 48 in Lilongwe. Its locational coordinates are 13.9438119°S 33.7530957°E.

Beijing Institute of Architectural Design designed the stadium with input from Malawian experts, while construction was undertaken by Anhui Foreign Economic Construction Group.

To reduce the overall cost of the project, any non-obligatory equipment, like electronic ticketing system, was scrapped and up to 900 workers were Chinese (total workforce of approximately 2,000). The project started on July 1, 2013 and was it completed on November 30, 2015, lasting 29 months. The stadium began operations in January 28, 2017 after having difficulty connecting to water and electricity lines.

There are some indications that the China Eximbank loan for the Bingu National Stadium Construction Project has financially underperformed vis-a-vis the original expectations of the lender.

In 2021, Malawi's Minister of Finance announced that ‘in 2020/21 FY, Government [of Malawi] requested temporary debt service suspension from bilateral creditors. This is in line with the Extended Debt Service Suspension Initiative (DSSI).

The key feature of the Extended DSSI is that the repayment period of the principal and interest payments falling due between 1st January 2021 to 30th June 2021 will be made in five years with one-year grace period.

This entails that in 2021/22 FY, the suspended debt service will be within the grace period.’ Then, in November 2022, the World Bank and the IMF judged the Government of Malawi’s external debt and overall public debt to be ‘in distress’—a downgrade from the previous World Bank-IMF Debt Sustainability Analysis (DSA).

In July 2023 correspondence with AidData’s Executive Director, the Government of Malawi revealed that it was in negotiations with China Eximbank about rescheduling all of their loans with amounts outstanding.

The Government of Malawi proposed principal payments worth RMB 61 million and interest payments worth RMB 26 million in 2023, interest payments worth RMB 26 million and principal payment deferrals in 2024 and 2025, RMB 50 million in principal and interest payments in 2026, RMB 90 million in principal and interest payments in 2027, RMB 89 million in principal and interest payments in 2028, RMB 88 million in principal and interest payments in 2029, RMB 87 million in principal and interest payments in 2030, RMB 86 million in principal and interest payments in 2031, and RMB 85 million in principal and interest payments in 2032.

China Eximbank proposed principal payments worth RMB 61 million and interest payments worth RMB 26 million in 2023, interest payments worth RMB 26 million and principal payment deferrals in 2024 and 2025, RMB 148 million in principal and interest payments in 2026, RMB 299 million in principal and interest payments in 2027, RMB 294 million in principal and interest payments in 2028, RMB 228 million in principal and interest payments in 2029, RMB 121 million in principal and interest payments in 2030, RMB 101 million in principal and interest payments in 2031, and RMB 82 million in principal and interest payments in 2032.

As of July 2023, a debt rescheduling deal had not yet been reached by the parties.