Completed Mixed AidData Chinese Aid

China Eximbank provides $14.06 million buyer’s credit loan for TIH-1 230kV Tekeze-Indeselasse-Humera Power Transmission Project (Linked to Record ID#45047)

$14.06M USD

Funder	Export-Import Bank of China (China Eximbank)
Recipient Organization	Commercial Bank of Ethiopia (CBE)
Country	Ethiopia
Start Date	Mar 04, 2008
End Date	Apr 25, 2032
Duration	8,818 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`92185`

Grant Description

China Eximbank provides $14.06 million buyer’s credit loan for TIH-1 230kV Tekeze-Indeselasse-Humera Power Transmission Project In November 2006, China Eximbank and the the Government of Ethiopia’s Ministry of Finance and Economic Development signed a $500 million buyer’s credit facility agreement (互惠贷款) — also known as a master loan framework agreement and a master facility agreement — for an unspecified set of development projects.

📋 Loan / Grant Terms

💰 Loan Amountfacility agreement (captured via Record ID#45047) carried the following borrowing terms: a 13-year maturity

📅 Maturity13 years

⏳ Grace Period4 years

All of the subsidiary loans were secured with (i.e., collateralized against) Ethiopia's export receipts to China, which at the time primarily consisted of sesame seed export receipts.

The buyer’s credit facility agreement also required that all Ethiopian exports (export receipts) to China to be overseen by the Commercial Bank of Ethiopia (CBE), the country’s largest state-owned financial institution.

As a source of collateral, the borrower was required to maintain a minimum cash balance in a debt service reserve account (DSRA) at the CBE.

The cash balance of the DSRA (escrow account) was $284,368,041 as of June 30, 2011, $308,914,767 as of June 30, 2012, $300,000,000 as of June 30, 2016, $300,000,000 as of June 30, 2017, $300,000,000 (ETB 8,260,410,000) as of June 30, 2018, $300,000,000 as of June 30, 2019, ETB 10,599,600,000 as of June 30, 2020, ETB 8,058,726,059 as of June 30, 2021, ETB 10,722,750,953 as of June 30, 2022, and ETB 9,832,603,839 as of June 30, 2023. 16 subsidiary loans for 16 different projects were reportedly approved under the buyer’s credit facility agreement. 16 subsidiary loans for 16 different projects were reportedly approved under the buyer’s credit facility agreement.

China Eximbank and the Government of Ethiopia signed a subsidiary buyer’s credit loan worth approximately ETB 129,601,795 ($14,063,391.24) for the TIH-1 230kV Tekeze-Indeselasse-Humera Power Transmission Project on March 4, 2008. The loan's first and last scheduled principal payment dates were December 31, 2011 and March 31, 2021, respectively.

Its first and last scheduled interest payment dates were July 1, 2009 and March 31, 2021, respectively.

The borrower was expected to use the proceeds of the loan to finance approximately 85% of the cost of an ETB 150,000,771.67 commercial contract between the Ethiopian Electric Power Corporation (EEPCo) — an Ethiopian state-owned enterprise — and Sinohydro Corporation Ltd. (Sinohydro), which was signed in August 2007.

According to the Government of Ethiopia’s AMP, the ETB 129,601,795 loan achieved a 45% disbursement rate, with China Eximbank making 2 loan disbursements (worth ETB 57,906,352) between 2010 and 2012: an ETB 45,740,781 disbursement on March 31, 2010, and an ETB 12,165,571 disbursement on January 8, 2012.

The project involved the acquisition and installation of equipment — including transformers, outgoing line bays, and transformers bays — at the Tekeze substation, the Indeselasse (also known as Inda Selassie, Endaselassie, and Shire) substation, and the Humera (also known as Himera and ሑሞራ) substation.

Sinohydro was the general EPC contractor responsible for project implementation.

This project was originally scheduled to commence on August 24, 2007 and reach completion within 11 months (July 24, 2008).

However, the substations along the Tekeze-Indeselasse-Humera transmission line was not put into operation until November 14, 2009.

📋 Staff Comments

For loan and debt rescheduling records with variable interest rates, AidData calculates the all-in interest rate at T0 based on the reference rate (such as LIBOR or EURIBOR) on the loan start date, plus any known margin. Please see the methodology for additional details. For this record, the margin was taken as the midpoint between the margin range.
This buyer's credit loan from China Eximbank is not included in the database of Chinese loan commitments that SAIS-CARI released in 2020 and re-released in 2021. Nor is it included it in the China’s Overseas Development Finance Dataset that Boston University's Global Development Policy Center published in December 2020.
The AMP system identification number for the TIH-1 230kV Tekeze-Indeselasse-Humera Power Transmission Project is 8714327100838.
1 Ethiopian Birr (ETB) was equal to 0.11 United States Dollars (USD) in June 2008, which implies that the ETB 129,601,795 loan commitment recorded in the AMP was worth USD 14,256,197.45 at that time that it was contracted.
This project is also known as the Tekeze-Indeselasse-Humera Substations Project. The Chinese project title is Tekeze-Indaselasie-Humera(TIH-1)230kV变电站项目.
According to CBE's financial statements for the year ending on June 30, 2012 (https://www.combanketh.et/cbeapi/uploads/2011_12_2037357399.pdf), 'CBE is the administrator of the total loan of USD 499,222,780, granted by EXIM Bank of China to the Ethiopian Electric Power Corporation (EEPCO) and Muger Cement Enterprise (MCE). The said loans are repayable by EEPCO and MCE to CBE in Birr over a period of ten years.'7. The loan identification number in the Government of Ethiopia’s Debt Management and Financial Analysis System (DMFAS) is 20776007 and the corresponding project name in DMFAS is ‘TEKEZE-ENDASELASSIE-HUMERA SUB’. See https://www.dropbox.com/scl/fi/7nrczfanixvivmiyzqx3i/MOFED-Loan-Level-Data-on-Borrowing-Terms-and-Loan-Performance-September-2024_OTHER_PUBLIC.xlsx?rlkey=5sqhh9ii4t3x8cmz0jf6s7cod&dl=08. As of September 2024, the Government of Ethiopia recorded the loan's all-in interest rate as 2% in DMFAS (see https://www.dropbox.com/scl/fi/7nrczfanixvivmiyzqx3i/MOFED-Loan-Level-Data-on-Borrowing-Terms-and-Loan-Performance-September-2024_OTHER_PUBLIC.xlsx?rlkey=5sqhh9ii4t3x8cmz0jf6s7cod&dl=0), which suggests the possibility of a debt rescheduling involving an interest rate reduction. This issue warrants further investigation.

📚 Sources & References

TIH-1 230KV TEKEZE-INDESELASSE-HUMERA POWER TRANSMISSION PROJECT
INVITATION TO BID
Ethiopia
Chinese firms sign massive power supply contracts
Chinese contracts for Ethiopia, 14 Catalysing China–Africa Ties for Africa’s Structural Transformation: Lessons from Ethiopia
中国水电建设集团签署埃塞变电站项目供货合同
INVITATION TO BID
China and India and Ethiopia final report - FES Ethiopia
中国水电签约埃塞俄比亚MG-2线路设计供货项目合同
FINAL-TEKEZE INAGURATION BULLETIN
ETHIOPIA – HYDROPOWER
Ethiopia: Tekeze begins power generation today
CBE Annual Report 2011-2012
CBE Annual Report 2010-2011
Infrastructure Development in Ethiopia and Its Impact on Economic Diplomacy With China
List of Ethiopia- China Cooperation Major Projects from Ethiopia's Ministry of Finance September 2024
MOFED Loan-Level Data on Borrowing Terms and Loan Performance September 2024_OTHER_PUBLIC 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.