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RE: Preferential Buyer Credit Loan Application for the projects cooperated between Ministry of Energy, and CHINESE EPC
We are approaching with the Export-Import Bank of China (Exim Bank) about the preferential buyer credit loan for the package of projects cooperated between Ministry of Energy, and CHINESE EPC. We reported the current progress of the projects and the general situation of the cooperation with Ministry of Energy, your Country.
At present stage, according to the Exim Bank, you are required to supply the documents in the “List of documents to be submitted�?for the preferential buyer credit loan application (Details please refer to the attachment) as sooner as possible. If you cannot provide all the documents at present, you may supply the “Loan Proposal for Preferential Buyer Credit Loan�?(Annex-1) at first. It’s a very important document for the loan application. (Each project needs to fill in a Loan Proposal separately).
We will keep in touch with the Exim Bank. Once you finished contract signature and the documents mentioned above, we will further promote the preferential buyer credit loan for the projects.
Yours faithfully,
ATTACHMENT:
PREFERENTIAL BUYER CREDIT LOAN
List of documents to be submitted
1. Loan Proposal duly signed by the Minister of Ministry of Finance (Please refer to the format Annex-1).
2. Commercial Contract (finalized between the Project Executing Agency and Chinese contractor, EPC).
3. Feasibility Study Report of projects approved by the Government (containing Project Background, Construction Necessity, the Objective, scope of work, the Solution of Construction, Total Amount of Investment with A Break-down List, Economical and Social Evaluation, Repayment Schedule, etc.); The approval document should be also submitted.(The detailed requirement of the feasibility study report please refer to the Annex-2).
4. Introduction of investment environment.
5. The funding source of repayment and the internal approval procedure for payment of interests and fees and repayment (the flow chart of the procedure is required).
6. Introduction of the Project Executive Agency (The constitutional documents, the audited financial statements and the performance record).
Annex-1:
Loan Proposal for Preferential Buyer Credit Loan
To: The Export-Import Bank of China
The Government of Republic of Your Country hereby confirms the intent to utilize a Preferential Buyer Credit Loan facility in a maximum aggregate amount of up to USD to finance the project. The Government of Republic of Your Country represented by the Ministry of Finance is the borrower. Major conditions are as follows:
1. Brief description of project:
2. Construction Period�?U> months
3. Maturity: years, including year’s grace period
4. Sponsor & project-executing agency:
5．Chinese contractor/exporter�?U>
(Signature)
Name:
Title: Minister of Ministry of Finance
Kindly contact with the following person for more detailed information�?/DIV>
Name:
Title:
Telephone No.
Fax No.
Annex-2:
Structure of Project Feasibility Study / Proposal (China Eximbank )
Country Overview
1. General introduction
2. Political system and Government structure
3. Macro-economic introduction
4. National development strategy and industrial development plan
Project Introduction
1. Background: Mission and Necessity
2. Executive summary: project location, scope, investment, etc.
3. Total investment and budget arrangement: capital, self-raised fund, loan, etc.
4. Executing agency and owner
5. Project period and implementation plan
Foreign Financing Facility
1. Lender
2. Terms of Financing: term, repayment period, grace period, interest rate, fees, etc.)
3. Detailed project budgeting and financing plan
Executive Agency ( Investor )
1. Constitutional documents, registration
2. Shareholders and management structure
3. Business scope
4. Operation and management
5. Performance and history record
6. Audited financial statements of recent three year
Preparation of Project
1. Feasibility study and government’s approval
2. Environment impact assessment
3. Construction site and approval
4. Evaluation of contractor
5. Commercial / EPC contract and approval
Construction and Implementation
1. Detailed Construction plan and technical plan:
1) construction site
2) construction scope
3) construction period
4) affiliated conditions : road, water, electricity, security, etc
2. Market analysis
1) product
2) marketing position
3) targeted market segment
4) potential investors
5) sales plan
3. Business proposal and operation plan
4. Rational analysis
Procurement
1. Procurement principle and methods
2. Procurement plan: BOQ, service, training, etc.
3. Rational analysis
Economic and Social benefits Analysis
1. Economic analysis
2. Financing assessment:
1) cash flow analysis,
2) cost and revenue analysis
3) key indicators analysis: NPV, FIRR, IRR
4) sensitive analysis
3. Social benefit and impact
1) employment
2) taxation revenue
3) local economic development
4) human resource
5) inflow investment
4. Environment impact assessment
Investment Environment
1. Legal
2. Taxation
3. Labor union and employment
4. Sector status quo
Repayment Analysis
1. Repayment methods
2. Source of repayment
3. Repayment plan
4. Cash flow analysis
Risk Analysis and mitigation plan
1. Economic and social environment risk
2. Legal and regulation risk
3. Market risk
4. Construction risk
5. Operational risk
6. Labor union and employment
7. Product and technical risk
8. Implementation / construction risk
9. Financing and repayment risk
Conclusion
1. Significance and necessity to the country
2. Economic and social benefits
3. Project plan and preparation
4. Financing and repayment
5. Risks and control
Appendix:
1. Statistics and Data
2. Charts
3. Supporting documents
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