Completed Development AidData Chinese Aid

[China Co-Financing Fund] IDB administers 12 million USD loan from CHC to Adelca for Steel Plant in Milagro

$12M USD

Funder	People's Bank of China (PBC)
Recipient Organization	Acería del Ecuador C.A. - Adelca
Country	Ecuador
Start Date	Oct 30, 2015
End Date	Sep 10, 2030
Duration	5,429 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`85320`

Grant Description

[China Co-Financing Fund] IDB administers 12 million USD loan from CHC to Adelca for Steel Plant in Milagro On 30 October 2015, the Inter-American Development Bank (IDB) signed a loan contract with Acería del Ecuador C.A. - Adelca (Adelca) to finance the construction of a steel plant in Milagro, through which the IDB would provide 37 million USD from its ordinary capital (Loan 3475A/OC-EC), and the People's Bank of China would provide 12 million USD (Loan 3475/CH-EC) via the China Co-Financing Fund for Latin America and the Caribbean (CHC).

The IDB lists the total anticipated project cost as 131 million USD, with Adelca expected to provide 82 million USD of counterpart financing. The IDB approval date for this loan financing was 20 May 2015, and it refers to this project as "EC-L1144 : Adelca".

This project is intended to support development in Ecuador's construction and infrastructure sectors, given the importance of steel in these industries.

The steel plant in Milagro, Guayas, will be used to recycle scrap metal, and will have a capacity of 400,000 tons per year.

It is estimated to have created about 450 jobs, and it will produce "value added steel products"–such as wire rod, straight rod, and rolled rod–while also integrating small scrap collectors into Adelca's value chain. According to Adelca's 2017 Memoria de Sostenibilidad, construction began in the first quarter of 2014.

The first phase was complete in the last quarter of 2016, with the start of the rolling mill, and the smelting process is expected to start operations in the first quarter of 2018. In February 2016, the facilities were reported to be about 65% complete by El Telégrafo. The project status is listed as "Closed" by the IDB, but no precise commercial operation date is available.

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.

📋 Staff Comments

Although no loan contract is available to confirm transaction amount, it has been assumed that the amount authorized on May 20, 2015 (12 million USD) was the amount actually provided in the loan contract.

📚 Sources & References

EC-L1144 : Adelca
IDB sponsors financing of steel plant in Ecuador
RESOLUTION DE-34/15 Ecuador. Loan 3475/CH-EC to Acería del Ecuador C.A. - Adelca China Co-financing Fund for Latin America and the Caribbean
LA INVERSIÓN ES DE $ 130 MILLONES E IMPLICA UN CRÉDITO DEL BANCO INTERAMERICANO DE DESARROLLO (BID), 2017 Memoria de Sostenibilidad Aceria del Ecuador Adelca, 75% de nuevas plazas de trabajo en ADELCA será para milagreños por pedido de alcaldesa
FACTIBILIDAD DE CONSTRUCCIÓN DE UNA PLANTA SIDERÚRGICA DE LA EMPRESA ACERÍA DEL ECUADOR C.A.
EN LA CIUDAD DE MILAGRO
DOCUMENTO DEL BANCO INTERAMERICANO DE DESARROLLO 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.