CHEC provides loan — via deferred payment arrangement — for Phase 1 of Al-Khair (Dama Dama) Oil Terminal Construction Project

📋 Staff Comments

1. This project is also known as Phase 1 of the El Khair Petroleum Terminal Project, Phase 1 of the Alkhair Petroleum Terminal Project, Phase 1 of the Sudan Dama Oil Wharf Phase II Dredging and Reclamation Project, the Damma Oil Terminal Phase I Project, the Dama Dama Oil Terminal Phase 1 Project, and the Port Sudan 50,000-ton Dama Refined Oil Terminal Project. The Chinese project title is 達瑪達瑪成品油碼頭一期工程及綠地 or 苏丹港5万吨级达玛成品油码头工程 or 油码头程疏浚与吹填项目 or 丹港达玛油码头 or 港达玛油码头 or 达玛达玛成品油码头一期工 or 苏丹港5万吨级码头项目 or 达玛成品油码头之.
2. In a typical receivables financing agreement (or deferred payment agreement), the company that the project owner in the host country has selected as its engineering, procurement, and construction (EPC) contractor is also a lender to the project owner. The company assigns receivables under its EPC contract with the project owner to one of or more banks. Upon assignment of receivables, the bank or banks will release funds to the company so it can discharge its obligations under the receivables financing agreement as a lender. Receivables financing is also known as accounts receivable financing (finance) or A/R financing (finance) or 应收账款融资 (in Chinese). These other terms are used because the accounts receivable of a company (i.e., unpaid invoices) are being used as collateral to unlock working capital—typically in the form of a bank loan (‘receivables loan’). Sellers often face cash flow problems when their buyers do not make full payment at the due date of the invoice. A receivables financing arrangement addresses this problem by allowing them to sell their outstanding invoices to a bank at a discounted rate. This approach allows the seller to receive the remaining invoice amount before the due date of the invoice. The bank either gets its money back at invoice maturity through the seller (acting as a collecting agent) or directly from the debtor.
3. In Chinese, a deferred payment agreement is known as《延期付款协议》.
4. The face value of the deferred payment agreement is unknown. For the time being, AidData assumes that it is equivalent to 85% of the value of the EPC contract ($13 million).
5. Sea Ports Corporation (SPC) is an independent state corporation of Sudan that governs, constructs and maintains the ports, harbors and lighthouses of Sudan. The company was founded in 1974 by the government of Sudan to be the national port operator and port authority.
6. On January 15, 2014, CHEC and SPC signed a commercial contract for Phase 2 of the Al-Khair (Dama Dama) Oil Terminal Construction Project (苏丹港达玛油码头二期疏浚工程). The project scope mostly involved basin and channel dredging, land area reclamation, and leveling activities. Phase 2 was underway in 2015, but it is unclear if it was financed through a deferred payment arrangement. This issue warrants further investigation. See https://news.sina.cn/2015-12-03/detail-ifxmhqaa9836487.d.html?from=wap and https://www.chinca.org/sjtcoc/info/65534 and https://www.dredgingtoday.com/2014/01/15/chec-bags-sudan-dama-dredging-contract/.
7. This loan is omitted from the SAIS-CARI database of Chinese loan commitments that was released in July 2020.

📚 Sources & References

• 中國港灣：乘大勢深耕細作勇爭先 謀發展高端引領快轉型 原文網址：https://read01.com/aAnjddx.html
• 苏丹港新集装箱码头及疏浚工程项目管理实践_参考网
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• 中国港湾：乘大势深耕细作勇争先 谋发展高端引领快转型
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• CCCC-FHDI 1 أغسطس 2011 م بسم الله الرحمن الرحيم جمهورية السودان وزارة النقل هيئة الموانئ البحرية SEA PORTS CORPORATION., “一路一带”助力苏丹港区建设
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• Elkhair Oil Terminal (Phase II) Environmental Baseline Study.
• Sudan Sea Ports Handbook 2016-18 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.