Completed Development AidData Chinese Aid

China Eximbank provides $10.55 million government concessional loan for Xayaburi Rural Electrification Project

$10.55M USD

Funder	Export-Import Bank of China (China Eximbank)
Recipient Organization	Government of Laos
Country	Lao People's Democratic Republic
Start Date	May 18, 2009
End Date	Feb 16, 2031
Duration	7,944 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`85325`

Grant Description

China Eximbank provides $10.55 million government concessional loan for Xayaburi Rural Electrification Project On May 18, 2009, China Southern Power Grid Co., Ltd and Electricite du Laos (EDL) signed a $10.55 million commercial (EPC) contract for the Xayaburi Rural Electrification Project.

China Eximbank subsequently issued a government concessional loan (GCL) to the Government of Laos to finance the EPC contract.

📋 Loan / Grant Terms

📅 Maturity22.2696 years

⏳ Grace Period6.975 years

💹 Interest Rate2.3143%

The purpose of the project was to build 4 new 22-kV transmission lines measuring 323 kilometers in length, 400-volt transmission lines measuring 86 kilometers in length, and substation capacity of 4330 kVA within Xayaburi Province. China Southern Power Grid Co., Ltd was the EPC contractor responsible for implementation.

The project was fully operational as of February 21, 2013. It reportedly benefited 51,000 people and 8,000 households in 69 villages within Xayaburi Province.

There are multiple indications that the China Eximbank loan for this project may have financially underperformed vis-a-vis the original expectations of the lender. In 2020, the Laotian authorities urgently sought debt relief from China Eximbank.

At that time, the gross reserves of the Bank of Laos stood at only 1.5 months of import cover and credit rating agencies warned of a high default probability.

In 2020, China Eximbank also agreed to reprofile multiple loan agreements that it had previously signed with the Government of Laos (as captured via Record ID#96464).

These debt service payment deferrals lasted for approximately 4-years (2020 and 2023) and provided approximately $1.892 billion of cash flow relief ($1.422 billion in deferred principal payments and $470 million in deferred interest payments). Deferred principal and interest repayments in 2020 were worth $202 million.

Deferred principal and interest payments were worth $426 million in 2021. Deferred principal and interest payments were worth $594 million in 2022. Deferred principal and interest payments were worth $670 million in 2023.

📋 Staff Comments

The Chinese project title is 老挝沙耶武里省农村电气化项目.
The China Eximbank loan that supported this project is not included in the Overseas Development Finance Dataset that Boston University’s Global Development Policy Center published in December 2020.
Per China Eximbank's policy of allowing borrowers to use GCLs to finance the full cost of EPC contracts, AidData assumes the face value of the GCL was $10.55 million. The GCL was almost certainly denominated in RMB, but AidData was not able to identify the face value of the GCL or the EPC contract in RMB. This issue merits further investigation.
According to the World Bank's Debtor Reporting System (DRS), the weighted average maturity of all official sector lending from Chinese creditors to government and government-guaranteed borrowing institutions in Laos was 22.2696-years in 2009. AidData estimates the maturity of the China Eximbank loan that supported the Xayaburi Rural Electrification Project by using this figure. See https://www.dropbox.com/scl/fi/uno1hf2pjg3nfz78h72c6/Private-and-Official-Sector-PRC-Borrowings-and-Borrowing-Terms-of-Lao-PDR-September-2024.xlsx?rlkey=s7eas067aykllu1lik074l5x5&dl=05. According to the World Bank's Debtor Reporting System (DRS), the weighted average grace period of all official sector lending from Chinese creditors to government and government-guaranteed borrowing institutions in Laos was 6.975-years in 2009. AidData estimates the grace period of the China Eximbank loan that supported the Xayaburi Rural Electrification Project by using this figure. See https://www.dropbox.com/scl/fi/uno1hf2pjg3nfz78h72c6/Private-and-Official-Sector-PRC-Borrowings-and-Borrowing-Terms-of-Lao-PDR-September-2024.xlsx?rlkey=s7eas067aykllu1lik074l5x5&dl=06. According to the World Bank's Debtor Reporting System (DRS), the weighted average interest rate of all official sector lending from Chinese creditors to government and government-guaranteed borrowing institutions in Laos was 2.3143% in 2009. AidData estimates the interest rate of the China Eximbank loan that supported the Xayaburi Rural Electrification Project by using this figure. See https://www.dropbox.com/scl/fi/uno1hf2pjg3nfz78h72c6/Private-and-Official-Sector-PRC-Borrowings-and-Borrowing-Terms-of-Lao-PDR-September-2024.xlsx?rlkey=s7eas067aykllu1lik074l5x5&dl=0

📚 Sources & References

广西承建的老挝电力项目正式运行
南方电网总承包老挝沙耶武里省农村电气化项目
China's Overseas Development Finance 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.

All Grantees

Government of Laos

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