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Basic Concept
Chinese Government Concessional Loan refers to the medium and
long-term, low interest rate credit extended by the China Eximbank
under the designation of the Chinese Government, to the Government
of the Borrowing Country with the nature of official assistance.
The Export-Import Bank of China is authorized by the Chinese Government
as the sole lender of the Concessional Loan.
Objective
Promote economic development and improve living standard in developing
countries
Boost economic cooperation between developing countries and China
Resource and Utilization of Funds
China Eximbank raises funds in domestic financial market through
bond issuing. Chinese Government subsidizes interest rate difference.
The Loan is mainly used to procure mechanical and electronic products,
complete sets of equipment, high tech product, services as well
as materials from China.
Main project sectors
infrastructure
Such as energy, transportation, telecommunication
Industrial
Such as manufacturing, mining etc.
Social welfare
Such as health-care, housing etc.
Basic Criteria for Project
The project should be approved by both the Chinese Government
and the government of the Borrowing country
The project should be technically feasible and can generate favorable
economic returns
The project should have good social benefits
Chinese enterprises should be selected as contractor/exporter
Equipments, materials, technology or services needed for the project
should be procured from China ahead of other countries. In principle,
no less than 50% of the procurements shall come from China.
Terms and Conditions of Loan
Loan Amount
In principle, the Loan amount should be no less than RMB 20 million
(approximately USD 2.4 million).
Loan Currency
The loan is denominated in Renminbi Yuan
Borrower
Borrower is normally the Government of the Borrowing Country represented
by Ministry of Finance
Interest Rate and Maturity Period
Interest Rate and Maturity Period are Fixed by Chinese Government
and stipulated in inter-governmental framework agreement
Maturity Period
Maturity Period includes Grace Period and Repayment Period
Grace Period
In Grace Period, the borrower shall pay the interest but no principal
Availability Period = Drawdown period
Borrower can make drawdown within Availability Period. The Availability
Period is included in the Grace Period and matches the implementation
period of the project.
Interest payment
Interest is calculated and paid semi-annually. Interest collection
dates are fixed on March 21st and September 21st every year.
Principal repayment
In repayment period, the principal is repaid semi-annually in equal
installments. Principal repayment dates are fixed on March 21st
and September 21st every year
Management Fee
Management Fee is calculated on the basis of the total amount of
the Loan and paid in one lump sum before the first drawdown
Commitment Fee
Commitment Fee is calculated on the basis of the undrawn amount
of the Loan and paid on interest collection dates
Project Cycle
1 Application
Candidate project can be proposed to the Chinese Government or
China Eximbank by Borrowing country based on development plan and
strategy
Documents required
* Application
* The approval of the Government of the Borrowing country
* Feasibility study report: containing the objective, scope and
content of the project and detailed information on technical, economical
and social aspects.
* The commercial contract or other intention agreements.
* Brief introductions and financial statements of the project executing
agency and Chinese contractors/ exporters.
2 Appraisal
China Eximbank conducts appraisal at its own discretion
Reports results to the Chinese Government
Following aspects are analyzed during appraisal
* Objective and necessity of the project
* Technical, financial, economical and social aspects of the project
* Macro-economic situation and debt servicing ability of the Borrowing
Country
* Management capability and financial strength of executing agency.
* Qualification and performance records of Chinese contractor/exporter.
3 Agreement
Inter-governmental Framework Agreement is signed by two
Governments, specifying purpose, amount, maturity period and interest
rate of the facility
Loan Agreement is signed by China Eximbank and Borrower
in line with inter-governmental framework agreement
4 Implementation and Disbursement
Borrower makes drawdown according to Loan Agreement
Implementation is essentially the obligation of the Borrower and
the executing agency
China Eximbank monitors the implementation to ensure the efficient
use of funds
The Borrower reports to China Eximbank progress of project, use
of funds and provides necessary assistance
After project is completed, the Borrower sends a completion report
to China Eximbank
5 Operating and Debt Servicing
Executing Agency has the responsibility to operate the project.
China Eximbank may monitor the project and offer advice when it
is necessary.
The Borrower has the obligation to pay interest and fees and
repay the principal according to the provision of Loan Agreement.
After a period of operation, China Eximbank makes Ex-post evaluation
on the project on a case by case basis.
Disbursement Procedures
Contact Information
Concessional Loan Department
The Export-Import Bank of China
Address: No. 77, Beiheyan St.,
Doncheng District,
Beijing, China 100009
Tel: African Region 8610- 64099521/22/24 /27/35/25
Asian Region 8610- 64099529/30/32/15
Latin American and Pacific Region 8610- 64099517/18/33
Fax: 86-10-64005707/64099534
Website: http://www.eximbank.gov.cn
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Brief
Introduction
