Completed Commercial AidData Chinese Aid

ICBC contributes to $2.5 billion syndicated loan to Sonangol for unspecified purposes

$416.67M USD

Funder	Industrial and Commercial Bank of China (ICBC)
Recipient Organization	Sonangol E.P.
Country	Angola
Start Date	Mar 22, 2013
End Date	Oct 31, 2030
Duration	6,432 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`105692`

Grant Description

ICBC contributes to $2.5 billion syndicated loan for unspecified purposes On March 22, 2013, Sonangol Finance Limited — a wholly owned subsidiary of Sociedade Nacional de Combustiveis de Angola (Sonangol), Angola's state-owned oil company — signed a $2.5 billion pre-export term facility (loan) agreement with a group of banks.

Participants in the loan syndicate included FirstRand Ltd, ING, Industrial & Commercial Bank of China (ICBC), Mizuho, SG Corporate & Investment Banking, and Sumitomo Mitsui Financial Group.

📋 Loan / Grant Terms

💰 Loan Amounthad a maturity of 5 years

On June 30, 2017, Sonangol Finance Limited fully repaid this loan when it made an $458,333,333 early loan repayment.

📋 Staff Comments

A pre-export finance (PXF) facility an arrangement in which a commodity (e.g. oil) producer gets up-front cash from a customer in return for a promise to repay the customer with that commodity (possibly at a discount) in the future. PXF funds may be advanced by a lender or syndicate of lenders to a commodity producer to assist the company in meeting either its working capital needs (for example, to cover the purchase of raw materials and costs associated with processing, storage and transport) or its capital investment needs (for example, investment in plant and machinery and other elements of infrastructure). PXF facilities are usually secured by (1) an assignment of rights by the producer under an ‘offtake contract’ (i.e., a sale and purchase contract between the producer and a buyer of that producer of goods or commodities), and (2) a collection account charge over a bank account into which proceeds due to the producer from the buyer of the goods or commodities under the offtake contract are credited. There are two key documents in prepayment finance transactions: a contract providing for the advance payment by the offtaker to the producer for the purchase of goods/commodities (the 'Prepayment Contract'), and a loan agreement between a lender and the offtaker (the 'Offtaker Loan Agreement') under which the advance payment is financed.
The loan is also known as a receivables purchase agreement facility.
For more information on the early prepayment of the loan, see pgs. 150 and 151 of Sonangol’s Management Report and Consolidated Accounts 2017 (https://www.dropbox.com/scl/fi/7jhwalmuyavwszvspq1x5/sonangol-annualreport-2017-eng.pdf?rlkey=w6n6njkitwzzczdg1k8coeshg&dl=0).
The size of ICBC’s contribution to the lending syndicate is unknown. For the time being, AidData assumes equal contributions across the 6 known members of the syndicate ($416,666,666).

📚 Sources & References

Sonangol Annual Report 2017
BNP Paribas refuses Angola bond mandate 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.