Active Mixed AidData Chinese Aid

China Eximbank provides $194.8 million buyer’s credit for Zambia Township Roads (Lot 2) Project (Linked to Record ID#57227)

$194.82M USD

Funder	Export-Import Bank of China (China Eximbank)
Recipient Organization	Government of Zambia
Country	Zambia
Start Date	Nov 23, 2018
End Date	May 31, 2028
Duration	3,477 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`57229`

Grant Description

China Eximbank provides $194.8 million buyer’s credit for Zambia Township Roads (Lot 2) Project On November 23, 2018, China Eximbank and the Government of Zambia signed a $194,815,136 buyer’s credit (loan) agreement for the Zambia Township Roads (Lot 2) Project.

📋 Loan / Grant Terms

💰 Loan Amountare unknown

However, it is known that the borrower was expected to use the proceeds of the loan to finance approximately 85% of a $229,195,226.00 commercial contact between Zambia's Road Development Agency (RDA) and AVIC International, which was signed in March 2017. The remaining 15% was to be directly funded by the Government of Zambia.

The scope of the project includes the engineering design, rehabilitation, upgrading and construction of approximately 154 km of selected township roads in Ndola, Kalulushi, Chambeshi and Luanshya districts within Copperbelt Province. The project also includes walkways, street lighting and traffic lights at selected junctions.

AVIC International is the general (EPC) contractor responsible for implementation.

As of late 2020, the RDA described Lot 2 construction activities as ‘ongoing.’ However, the Mayor of Luanshya announced in February 2021 that the Luanshya district project component was slated to commence in March 2021. The contract was originally expected to take 36 months to complete.

📋 Staff Comments

This project is also known as the ZTR 2 Project, the Copperbelt Province Urban Road Lot 2 Project, the 154 km of Township Roads in Ndola, Kalulushi, Chambeshi and Luanshya (Lot 2) Project, and the Ndola, Kalulushi, Chambeshi and Luanshya Copperbelt Province Urban Road Lot 2, 154 km Project. The Chinese project title is 铜带城市道路升级改造项目 or 铜带城市道路升级改造项目 Lot2.
Beginning in 2019, Zambia's Road Development Agency identified the Export-Import Bank of China as the financier of the Zambia Township Roads (Lot 2) Project.
Due to the fact that the China Eximbank loan was used to finance 85% of the total cost of a commercial contract with AVIC International, AidData assumes that it was provided in the form of an export buyer’s credit. It is unclear if the export buyer’s credit is of a preferential nature or non-preferential nature. This issue warrants further investigation.
According to the World Bank's Debtor Reporting System (DRS), the weighted average grace period of all official sector lending from all Chinese creditors to government and government-guaranteed borrowing institutions in Zambia was 3.4733-years in 2018. AidData estimates the grace period of the China Eximbank loan that supported the Zambia Township Roads (Lot 2) Project by using this figure. See https://www.dropbox.com/scl/fi/uyz6w7q31x2o8i6rna7ug/DRS-May-2024-Extraction-Official-Chinese-Loan-Commitments-to-Zambia.xlsx?rlkey=n0a6270w91pdmmfyaoqva419r&dl=0 5. According to the World Bank's Debtor Reporting System (DRS), the weighted average maturity of all official sector lending from all Chinese creditors to government and government-guaranteed borrowing institutions in Zambia was 12.8605-years in 2018. AidData estimates the maturity of the China Eximbank loan that supported the Zambia Township Roads (Lot 2) Project by using this figure. See https://www.dropbox.com/scl/fi/uyz6w7q31x2o8i6rna7ug/DRS-May-2024-Extraction-Official-Chinese-Loan-Commitments-to-Zambia.xlsx?rlkey=n0a6270w91pdmmfyaoqva419r&dl=0 6. According to the World Bank's Debtor Reporting System (DRS), the weighted average interest rate of all official sector lending from all Chinese creditors to government and government-guaranteed borrowing institutions in Zambia was 5.728% in 2018. AidData estimates the interest rate of the China Eximbank loan that supported the Zambia Township Roads (Lot 2) Project by using this figure. See https://www.dropbox.com/scl/fi/uyz6w7q31x2o8i6rna7ug/DRS-May-2024-Extraction-Official-Chinese-Loan-Commitments-to-Zambia.xlsx?rlkey=n0a6270w91pdmmfyaoqva419r&dl=0

📚 Sources & References

2017 Annual Report, 2020 Road Sector Annual Work Plan
RDA Annual Report 2018, 2019 Road Sector Annual Work Plan
RDA 2019 Annual Report
中国对外承包工程国别（地区）市场报告 2019-2020
Friday, 29th January, 2021
Avic to rehabilitate Luanshya Roads
CONTRACTOR ENGAGED FOR LUANSHYA ROADS
Luanshya roads need an overhaul not rehabilitation – Chanda
Annual Economic Report 2018
Dipak drags Minister of Finance to court for contracting loans without parliament approval
China Eximbank Loans to Zambia 2018 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.

All Grantees

Government of Zambia

Interested in applying for this grant?

Complete our application form to express your interest and we'll guide you through the process.

Apply for This Grant