CNTIC provides loan — via accounts receivables financing facility arrangement — for 90MW Myingyan Gas-Fired Power Station Project

📋 Staff Comments

1. The Chinese project title is 缅甸敏建 90MW燃气电站项目 or 中技公司缅甸发电站项目.
2. More likely than not, Deutsche Bank signed an accounts receivable transfer agreement with CNTIC to provide financing for the construction period of the project. In this type of arrangement, the exporter (seller) procures insurance from an insurer and transfers its accounts receivable under the insurance policy to a bank. The bank then grants financing to the exporter (seller) and becomes the insured under the transferred insurance policy. When an insured loss occurs, the insurer pays indemnity to the financing bank pursuant to the insurance policy and the Accounts Receivable Transfer Agreement.
3. In a typical receivables financing agreement (or deferred payment agreement), the company that the project owner in the host country has selected as its engineering, procurement, and construction (EPC) contractor is also a lender to the project owner. The company assigns receivables under its EPC contract with the project owner to one of or more banks. Upon assignment of receivables, the bank or banks will release funds to the company so it can discharge its obligations under the receivables financing agreement as a lender. Receivables financing is also known as accounts receivable financing (finance) or A/R financing (finance) or 应收账款融资 (in Chinese). These other terms are used because the accounts receivable of a company (i.e., unpaid invoices) are being used as collateral to unlock working capital—typically in the form of a bank loan (‘receivables loan’). Sellers often face cash flow problems when their buyers do not make full payment at the due date of the invoice. A receivables financing arrangement addresses this problem by allowing them to sell their outstanding invoices to a bank at a discounted rate. This approach allows the seller to receive the remaining invoice amount before the due date of the invoice. The bank either gets its money back at invoice maturity through the seller (acting as a collecting agent) or directly from the debtor.
4. CNTIC, a large-scale state-owned enterprise and a wholly-owned subsidiary of China General Technology (Group) Holding Ltd. (‘Genertec’).
5. EPGE is Myanmar’s state-owned electricity company.

📚 Sources & References

• Deutsche Bank provides Sinosure-backed facility for Myanmar power project
• China National Technical IMP. & EXP. CORP. 2018-2019 Sustainability Report
• VPOWER GROUP INTERNATIONAL HOLDINGS LIMITED ANNUAL REPORT 2021
• VPOWER GROUP INTERNATIONAL HOLDINGS LIMITED ANNOUNCEMENT OF ANNUAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2021
• VPOWER GROUP LIGHTEN UP THE WORLD OF POSSIBILITIES 2019 ANNUAL REPORT
• Deutsche Bank provides USD43 million structured trade finance facility to CNTIC for electricity generation project in rural Myanmar
• Myingyan Gas-Fired Power Station Project Undertaken by CNTIC Put into Operation in Myanmar
• VPOWER GROUP INTERNATIONAL HOLDINGS LIMITED INTERIM REPORT 2022
• State counsellor
• President Xi Jinping hold bilateral talks, witness signing 33 agreements
• 德意志银行为中技公司缅甸发电站项目提供4300万美元融资
• 获缅甸政府就90兆瓦发电站授予承诺书
• RECEIVES LETTER OF ACCEPTANCE FOR A 90MW POWER PLANT FROM MYANMAR GOVERNMENT
• VPOWER GROUP INTERNATIONAL HOLDINGS LIMITED VOLUNTARY ANNOUNCEMENT
• VPOWER GROUP INTERNATIONAL HOLDINGS LIMITED DISCLOSABLE TRANSACTION
• Govt Readies Additional Supply of Electricity to Meet Demand
• Govt readies additional supply of electricity to meet demand 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.