CHINESE GOVERNMENT CONCESSIONAL LOAN

FRENCH

Basic Concept

● Chinese Government Concessional Loan refers to the medium and long-term, low interest rate credit extended by the China Eximbank under the designation of the Chinese Government, to the Government of the Borrowing Country with the nature of official assistance.

● The Export-Import Bank of China is authorized by the Chinese Government as the sole lender of the Concessional Loan.

● Objective

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● Promote economic development and improve living standard in developing countries

● Boost economic cooperation between developing countries and China

● Resource and Utilization of Funds

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● China Eximbank raises funds in domestic financial market through bond issuing. Chinese Government subsidizes interest rate difference.

● The Loan is mainly used to procure mechanical and electronic products, complete sets of equipment, high tech product, services as well as materials from China.

● Main project sectors

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● infrastructure Such as energy, transportation, telecommunication

● IndustrialSuch as manufacturing, mining etc.

● Social welfareSuch as health-care, housing etc.

● Basic Criteria for Project

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● The project should be approved by both the Chinese Government and the government of the Borrowing country

● The project should be technically feasible and can generate favorable economic returns

● The project should have good social benefits

● Chinese enterprises should be selected as contractor/exporter

● Equipments, materials, technology or services needed for the project should be procured from China ahead of other countries. In principle, no less than 50% of the procurements shall come from China.

● Terms and Conditions of Loan

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● Loan Amount In principle, the Loan amount should be no less than RMB 20 million (approximately USD 2.4 million).

● Loan Currency The loan is denominated in Renminbi Yuan

● BorrowerBorrower is normally the Government of the Borrowing Country represented by Ministry of Finance

● Interest Rate and Maturity Period Interest Rate and Maturity Period are Fixed by Chinese Government and stipulated in inter-governmental framework agreement

● Maturity Period Maturity Period includes Grace Period and Repayment Period

● Grace Period In Grace Period, the borrower shall pay the interest but no principal

● Availability Period = Drawdown periodBorrower can make drawdown within Availability Period. The Availability Period is included in the Grace Period and matches the implementation period of the project.

● Interest paymentInterest is calculated and paid semi-annually. Interest collection dates are fixed on March 21st and September 21st every year.

● Principal repaymentIn repayment period, the principal is repaid semi-annually in equal installments. Principal repayment dates are fixed on March 21st and September 21st every year

● Management Fee Management Fee is calculated on the basis of the total amount of the Loan and paid in one lump sum before the first drawdown

● Commitment Fee Commitment Fee is calculated on the basis of the undrawn amount of the Loan and paid on interest collection dates

● Project Cycle 1 Application

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● Candidate project can be proposed to the Chinese Government or China Eximbank by Borrowing country based on development plan and strategy

● Documents required* Application * The approval of the Government of the Borrowing country* Feasibility study report: containing the objective, scope and content of the project and detailed information on technical, economical and social aspects. * The commercial contract or other intention agreements.* Brief introductions and financial statements of the project executing agency and Chinese contractors/ exporters.

● 2 Appraisal

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● China Eximbank conducts appraisal at its own discretion

● Reports results to the Chinese Government

● Following aspects are analyzed during appraisal* Objective and necessity of the project* Technical, financial, economical and social aspects of the project * Macro-economic situation and debt servicing ability of the Borrowing Country* Management capability and financial strength of executing agency.* Qualification and performance records of Chinese contractor/exporter.

● 3 Agreement

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● Inter-governmental Framework Agreement is signed by two Governments, specifying purpose, amount, maturity period and interest rate of the facility

● Loan Agreement is signed by China Eximbank and Borrower in line with inter-governmental framework agreement

● 4 Implementation and Disbursement

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● Borrower makes drawdown according to Loan Agreement

● Implementation is essentially the obligation of the Borrower and the executing agency

● China Eximbank monitors the implementation to ensure the efficient use of funds

● The Borrower reports to China Eximbank progress of project, use of funds and provides necessary assistance

● After project is completed, the Borrower sends a completion report to China Eximbank

● 5 Operating and Debt Servicing

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● Executing Agency has the responsibility to operate the project. China Eximbank may monitor the project and offer advice when it is necessary.

● The Borrower has the obligation to pay interest and fees and repay the principal according to the provision of Loan Agreement.

● After a period of operation, China Eximbank makes Ex-post evaluation on the project on a case by case basis.

● Disbursement Procedures

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● Contact InformationConcessional Loan DepartmentThe Export-Import Bank of ChinaAddress: No. 77, Beiheyan St.,Doncheng District, Beijing, China 100009 Tel: African Region 8610- 64099521/22/24 /27/35/25Asian Region 8610- 64099529/30/32/15Latin American and Pacific Region 8610- 64099517/18/33Fax: 86-10-64005707/64099534Website: http://www.eximbank.gov.cn

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