Onlending loans of foreign governments and international financial institutions refer to sovereign loans borrowed from foreign governments (through foreign lending titutions) and international financial institutions by Chinese Ministry of Finance in the name of Chinese Government.
Project Types
The onlending projects could be divided into three types in accordance with different repayment obligations:
Type One: The borrower is either a department of the central government or a local provincial department of finance, who is responsible for the loan repayment.
Type Two: The borrower is the Chinese company that implements the onlending project and itself bears the responsibility of loan repayment.
The relevant department of the central government or the local provincial department of finance provides repayment guarantee for the project.
Type Three: The borrower is the Chinese company that implements the onlending project and itself bears the responsibility of loan repayment.And the repayment guarantee is provided by an institution that is neither a department of the central government nor a local provincial department of finance. When the borrower fails to perform loan repayment, China Eximbank will shoulder the responsibility of repayment.
Loan Coverage and Purpose
1.Client
The Loan is usually onlent to assorted legal persons including governments, enterprises and public institutions legally
2.Purpose
The Loan is utilized to help clients make payment for their procurement of equipment, technology, service and other related expenses incurred by commercial and / or consultant contracts.
Procedures
1.Chinese Ministry of Finance, the government window facing outward for the
cooperation with foreign governments and international financial institutions,
is responsible for signing the loan agreement with the lending government
or the international financial institution or entrusts China Eximbank to
sign loan agreement with foreign lending institutions. Development and
reform authorities at different regional levels are responsible for examining
and approving the project proposal, the feasibility study report and fund application.
2.Provincial departments of finance and authorities of development and reform should submit project documents and materials to their respective superintendent authorities. Chinese Ministry of Finance designates, upon the choice of the borrower, China Eximbank to perform onlending works
Lending Countries
Since April 1, 1995 when it started onlending services, China Eximbank has,up till now, onlent loans provided by over 20 foreign governments and five international financial institutions.
Terms and Conditions
The terms and conditions of the Loan are comparatively preferential with its long
maturity and low interest rate. Different governments set down different terms
and conditions for their loans. Credit terms of the loan by foreign government
and international financial institutions are the most favorable among the nation's
external debts, with its grant element mostly greater than 35 per cent.
Policy on Onlending Business
1.To carry out the state industrial policy and other relevant policies of utilizing
foreign funds;
2.To support mainly the economic and social development in such key sectors
as transportation, urban construction, education, medical treatment, water
works, agriculture, environment protection and energy conservation.
3.To actively support the implementation of such national strategies as
"developing the west", “revitalizing the old industrial bases in Northeast
China”and“rejuvenating the Central Region”, and give priority to
supporting the economic and social development of the central and western
regions of China and the old industrial bases in Northeast China;
4.To make full use of the long maturity, low interest rate and other preferential
terms of the Loan to support Chinese companies in their import of advanced
equipment and technology and to promote the restructuring of the national
economy.