1. General
The total amount of Preferential Loans announced by the Chinese Government to Latin American and Caribbean Countries in July 2014 was 10 billion USD. The Preferential Loans include two categories of loan facilities, the Chinese Government Concessional Loan and Preferential Buyer’s Credit. The Export-Import Bank of China (China EXIM Bank) is authorized by the Chinese Government for operation of the Preferential Loans.
The Chinese Government Concessional Loan refers to the medium and long term, low interest rate loan facility with the feature of government aid and grant. The recipient covers all developing countries that have diplomatic relations with China. The Chinese Government Concessional Loan is denominated in Renminbi Yuan, and could finance up to 100% of the total cost under the commercial contract signed with the Chinese contractor.
Preferential Buyer’s Credit refers to the loan facility with concessional terms provided for the purpose of promoting trade and economic cooperation. The recipient covers all developing countries that have diplomatic relations with China. Preferential Buyer’s Credit is denominated in US Dollar, and could finance up to 85% of the total cost under the commercial contract signed with the Chinese contractor. The remaining 15% of the cost of the commercial contract shall be paid by the recipient side as counterpart fund.
The Borrower of the above-mentioned Preferential Loans shall be the sovereign institution eligible for external borrowing, or the financial institutions or enterprises designated by the government of the recipient country, and guaranteed by the sovereign institution. The Maturity Period of the Preferential Loans consists of Grace Period, during which only the interest needs to be paid, and Repayment Period, during which the principal needs to be paid semi-annually in equal installments. The Interest Rate of the Preferential Loans will be fixed rates, and the interest needs to be paid semi-annually during the Maturity Period. The Management Fee will be charged in a lump sum at a certain percentage of the amount of the loan facility. The Commitment Fee will be charged semi-annually at a certain percentage of the undrawn loan facility.
2. Project Cycle
2.1 Loan Application
The projects under the Preferential Loans shall be applied formally by the government of the recipient country. The China EXIM Bank will be responsible for collecting the evaluation documents and conducting appraisal of the projects. For projects under the Chinese Government Concessional Loan, the appraisal opinion will be reported to the Ministry of Commerce of China. The Ministry of Commerce will arrange signing of the Inter-government Framework Agreement, before theChina EXIM Bank negotiates the specific Loan Agreement with the Borrower. For projects under Preferential Buyer's Credit, the appraisal opinion will be reported to the relevant government departments, and the China EXIM Bank can negotiate the Loan Agreement with the Borrower upon approval from the Chinese Government.
The evaluation documents needed to be provided mainly include Loan Application issued by the government of the recipient country, Recommendation Letter issued by the Economic and Commercial Counselor's office of the Chinese Embassy in the recipient country, Commercial Contract duly signed by the project owner and the Chinese contractor, Technical and Economic Feasibility Study Report, Environmental Impact Assessment Report and Environmental Permit issued by relevant authorities of the recipient country, and profile of the project owner and the consultant company, etc.
2.2 Disbursement of the loan facility
The Chinese contractor shall submit the payment documents based on completed work to the project owner. After the documents have been approved by the project owner and the consultant company, the project owner shall make a request to the Borrower for payment. The Borrower shall issue Irrevocable Notice of Drawdown to the China EXIM Bank. After verification of the payment documents, the China EXIM Bank will make disbursement to the account of the Chinese contractor designated by the Borrower.
3. Contact Information
Address:
Concessional Loan Department,
The Export-Import Bank of China
No. 30, Fuxingmen Nei St, Beijing, China
Contact Person:
Mr. XIE Yaogang (Caribbean and Central American Countries)
Tel: +86（10）83579679
E-mail: xieyaogang@eximbank.gov.cn
Ms. CHEN Han(South American Countries)
Tel: +86（10）83578483
