Active Mixed AidData Chinese Aid

China Eximbank provides $84.989 million buyer’s credit loan for Widening and Improvement of 64.31 km of Roads and Reconstruction of 13 Bridges in Central and Uva Provinces Project

$84.99M USD

Funder	Export-Import Bank of China (China Eximbank)
Recipient Organization	Government of Sri Lanka
Country	Sri Lanka
Start Date	Jun 07, 2018
End Date	May 25, 2032
Duration	5,101 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`53676`

Grant Description

China Eximbank provides $84.989 million buyer’s credit loan for Widening and Improvement of 64.31 km of Roads and Reconstruction of 13 Bridges in Central and Uva Provinces Project On June 7, 2018, China Eximbank (Hunan Branch) and the Government of Sri Lanka signed an $84,989,000 buyer’s credit loan (BCL) for the Widening and Improvement of 64.31 km of Roads and Reconstruction of 13 Bridges in Central and Uva Provinces Project.

📋 Loan / Grant Terms

📅 Maturity17.6 years

⏳ Grace Period3.1 years

The proceeds of the BCL are to be used by the borrower to finance approximately 85% of the cost of two commercial contracts (worth $99,987,100) with Hunan Construction Engineering Group Co., which were signed in 2019. China Eximbank disbursed $8,387,700.87 in 2019, $28,337,512 in 2020, $34,053,908 in 2021, and $13,849,671.59 in 2022.

The loan had achieved a 99.5% disbursement rate ($84,628,792.46 out of $84,989,000) as of December 31, 2021.

Its amount outstanding was $33,298,586 as of December 31, 2020, $67,352,493 as of December 31, 2021, and $69,626,238 as of June 30, 2022. By early 2022, it was clear that the loan was non-performing.

On April 12, 2022, the Government of Sri Lanka announced a ‘pre-emptive’ sovereign debt default, noting that it would suspend debt repayments to all external creditors other than multilateral institutions.

Its decision to suspend external debt service reportedly affected all China Eximbank loans with amounts outstanding at the time of the announcement.

The project has two components that are being supported by two separate contracts: (1) C1 for Widening & Improvement of Roads, and (2) C2 for Reconstruction and Improvement of Bridges.

C1 involves the widening and improvement of the 7.64 km Kandy-Kirimatiya Road (B195), the 2.25 km Ampitiya-Gurudeniya (Pichchamalwatta Road), the 27 km Nuwara Eliya-Ragala-Udupussellawa Road, the 17.83 km Welimada-Kirkless Road, and the 9.59 km Avissawella-Hatton-Nuwara Eliya Road.

C2 involves the reconstruction of Bridge Nos. 24/3 and 42/1 on Tennakumbura-Rikillagaskada-Ragala Road, the reconstruction of Bridge No 3/2 on Kandy Kirimatiya Road, the reconstruction of Bridge Nos. 23/3, 27/2, 30/4, 31/5, 34/8, 37/1 and 38/5 on Nuwara Eliya-Ragala-Udapussellawa Road, and the reconstruction of Bridge Nos. 1/1, 2/5, and 7/7 on Welimada-Kirkless Road.

Hunan Construction Engineering Group Corporation is the contractor responsible for implementation. This project entered implementation on November 29, 2018.

According to Sri Lanka's Road Development Authority, as of September 30, 2019, the C1 component of this project had achieved a 25% completion rate and the C2 component of this project had achieved a 37% completion rate. As of June 30, 2020, the C1 component of this project was 62% complete and the C2 component was 73% complete.

The project was originally expected to reach completion in May 2021.

📋 Staff Comments

This project is also known as the Road Network Improvement Project (RNIP). The Chinese project title is 斯里兰卡中部和乌瓦省13座桥梁重建和64.31公里道路扩建与等级提升项目.
One source identifies the maturity of the China Eximbank loan as 18-years and the grace period as 3-years.
One of the two commercial contract identification numbers is RDA/EXIM/COM/2019-078. The other is unknown. This issue merits further investigation.
This $84.989 million China Eximbank loan is not included in the China’s Overseas Development Finance Dataset that Boston University's Global Development Policy Center published in December 2020.
The Government of Sri Lanka loan key number is 2018022.
For the time being, AidData has not populated the insurance fee field. Most Sinosure insurance fees vary between 5-7%. However, the Government of Sri Lanka identifies a 1.6% fee in the Ministry of Finance's 'Annual Report 2020' publication (see https://www.treasury.gov.lk/api/file/f64f9700-0402-49d0-9f38-f28629a8c379). This issue warrants further investigation.
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.

📚 Sources & References

Progress of development projects and programmes being implemented in 2017 ( as at 31st December 2017)
Progress as per the end of 3rd Quarter 2017 Department of Project Management and Monitoring
Progress of development projects and programmes being implemented in 2017 (As at 30th September 2017)
Progress of development projects and programmes as at 31st March 2018
Road Network Improvement Project
EXIM Bank of China (Hunan Branch) Funded Widening and Improvement of 64.31 km Roads and Reconstruction of 13 Bridges in Central and Uva Provinces
FISCAL MANAGEMENT REPORT 2019
Widening and Improvement of 64.31 km of Roads in Central and Uva Provinces and Reconstruction of Thirteen (13) Bridges
Annual Performance Report (Highways Sector)
Annual Report 2018
Performance Report 2017
Performance Report 2018
List of Foreign Financing Loan Agreements Signed from 01st January to 31st December, 2018 with their Terms
China's Overseas Finance report on Souapiti
LinkedIn Samitha Wijekoon
斯里兰卡中部和乌瓦省13座桥梁重建和64.31公里道路扩建与等级提升项目
Progress of Large and Mega Scale Development Projects Second Quarter - Year 2021
ANNUAL REPORT 2018
CS-DRMS Report 814
The Export-Import Bank of China
Disbursements in 2014 January to December.pdf, 814 Disbursements Jan to Dec 2015
Disbursement from January to December 2016.pdf, 814-1 Annual 2017 for WEB New.pdf
Transactions For the period from to 2019/01/01 2019/12/31, 814 up to Oct 2018.PDF
Transactions For the period from to 2020/01/01 2020/12/31
Transactions For the period from to 2021/01/01 2021/11/30
Actual Disbursement by Transaction Date
FINANCIAL STATEMENTS OF THE GOVERNMENT FOR THE YEAR ENDED 31ST DECEMBER 2018
FINANCIAL STATEMENTS OF THE GOVERNMENT FOR THE YEAR ENDED 31ST DECEMBER 2019
FINANCIAL STATEMENTS OF THE GOVERNMENT FOR THE YEAR ENDED 31ST DECEMBER 2021
Instrument-wise Details of Central Government External Debt obtained under Foreign Law as at 2022/06/30, 2015 Annual Report Ministry of Finance Sri Lanka
FINANCIAL STATEMENTS OF THE GOVERNMENT FOR THE YEAR ENDED 31 ST DECEMBER 2020, 2024 disbursement report 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.