China Eximbank provides $50 million buyer’s credit loan for National Information Highway Fiber Optic Network Project (Linked to Record ID#85328, #85329, #85330, #85333, #85335, #85339)

China Eximbank provides $50 million buyer’s credit loan for National Information Highway Fiber Optic Network Project On April 28, 2006, Cambodia Fibre Optic Communication Network Company (CFOCN) — a project company owned by HyalRoute Communication Group Limited — was established to finance design, implement, and maintain the National Information Highway Fiber Optic Network Project.

Then, on December 11, 2007, CFOCN obtained a 35-year, land optic cable investment and operation license from the Ministry of Posts and Telecommunications of Cambodia.

In 2015, China Eximbank issued a $50 million buyer’s credit loan to CFOCN for the National Information Highway Fiber Optic Network Project. CFOCN secured a corporate guarantee from HyalRoute Communication Group Limited for the loan from China Eximbank. It also purchased buyer’s credit insurance from Sinosure for the China Eximbank loan.

The project involved the construction of an approximately 2,000 km fibre optic backbone network in Cambodia and it was implemented in two phases. The first phase of the project involved the laying of 1337 kilometers of fiber optic cable to serve 127,000 users. The second phase of the project involved the laying of 963 kilometers of fiber optic cable to serve 87,000 users.

Powerchina Huadong Engineering Corporation was the EPC contractor responsible for the implementation of both phases.

It signed an EPC contract for Phase 2 with CFOCN on June 19, 2014 and an EPC contract for Phase 1 with CFOCN on an earlier (unknown) date.

Phase 1 was implemented between July 25, 2014 to December 10, 2014, and Phase 2 was implemented between January 17, 2015 to May 20, 2015.

CFOCN also secured 6 additional loans to facilitate the implementation of the project: a $40 million buyer’s credit loan from China Development Bank (CDB), a $15 million loan from ICBC Phnom Penh Branch, a $16,750,000 loan from ICBC Phnom Penh Branch, a $15 million loan from ICBC Phnom Penh Branch, a $70 million loan from the ICBC Beijing Head Office, and a $15 million loan from Bank of China (BoC) Phnom Penh Branch: - CFOCN purchased buyer’s credit insurance from Sinosure for the $40 million loan from CDB (captured in Record ID#85328).

The borrower also pledged fiber optic network assets to CDB as a source of collateral. - The $15 million loan from ICBC Phnom Penh Branch (captured in Record ID#85329), the $16,750,000 loan from ICBC Phnom Penh Branch (captured in Record ID#85330), and the $15 million loan from ICBC Phnom Penh Branch (captured in Record ID#85333) were all backed by corporate guarantees from HyalRoute Communication Group Limited and pledges of fiber optic network assets as sources of collateral. - The $70 million loan from the ICBC Beijing Head Office (captured in Record ID#85335) did not benefit from a guarantee or a formal source of security collateral. - The $15 million loan from Bank of China (BoC) Phnom Penh Branch (captured in Record ID#85339) also did not benefit from a guarantee or a formal source of security (collateral).

CFOCN is also involved in a $174 million project to construct and operate submarine cables and a landing station in southwestern Preah Sihanouk Province, which is partially financed by AIIB; however, it is unclear if any Chinese state-owned banks are involved. This issue merits further investigation.