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Home > Project Financing  - How to sponsor China Concessional Loan

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How to sponsor China Concessional Loan

You can get booklet on how to get soft loan from China Eximbank by visiting here.

China government concessional loans
In the 1990s, with the political and economic development of developing countries and the progress of China's reform and opening-up program, the Chinese government reformed its foreign aid mode and introduced the concessional loan in accordance with the international practice. The government appointed the Bank as the only onlending bank for the Concessional Loan, China's official development aid loan.

Over the past ten years, the Bank have given full play to the function of managing official development aid projects as an financial institution by steadily and actively promoting the development of the business and making it gradually conform with international practice. These efforts played positive and significant roles in enlarging the scale of official development loan, enhancing the capital usage efficiency, and promoting economic development of aided countries as
well as strengthening the diplomatic, economic and trade relations between China and other developing countries.

The priority of the Chinese government concessinal loans undertaken by the Bank went to industries that were closely related to the economic development of the recipient countries, such as electric power, transportation and telecommunication. The loans promoted local economic development, provided job opportunities and created fine import substitute effects. They also facilitated the buildup of a group of large-scale projects of importance to the national economy and people's livelihood with prominent social benefits, such as low-cost housing, water supply, medical service, education, road, etc, which improved the living conditions of local people and won extensive praise of the recipient countries. The purchase of mechanical and electronic products, complete sets of equipment, technical services and other products in China by aided countries helped the Chinese enterprises and products enter the local markets, supported the export of high- and new-tech products of which China own the intellectual property rights, and promoted the economic and trade cooperation with other developing countries. In recent years, the concessional loan business which has been steadily developed and taken on a good momentum, has became an indispensable component of China's international economic cooperation.
How to sponsor a China government concessional loan supported projects
1. we need local agents who has good connection with the recipient developing country government departments for power, road, chemical, water supply and treatment, high way, telecommunication, mining, metallurgical, ports projects which are deadly needed for the counties development. The local agent should advise the governments these projects and help them short listed in its countries' invested projects by foreign preferential loans, esp. from China.
2. then if the sponsored projects are short listed, we usually need feasibility study of both technical and commercial documents for us to asses the possibility of fund from China.
3. you need a powerful and influential Chinese partner for the to be funded projects. Sinomach, and its subsidiaries as CMEC, ChinaAuto, Chinacables are the major power, road, chemical, water supply and treatment, high way, telecommunication, mining, metallurgical, ports projects EPC contractors from China to the world through the form of contracting, government concessional loans, buyer's credit arrangement of financing. These Chinese National companies have been aranging preferential loans for financing foreign projects for decades. So they have the required connection and influence to get the fund for sponsored projects. and most important is that when China government is planning to offer loans, government wish to have the projects finished in time with high quality. So only these reputable and respected companies as Sinomach, CMEC and Chinacables, Chinaauto have the track record to convince Chinese and recipient countries that the funded projects will be constructed timely with quality.
4. after you have chosen the right Chinese partners, the next step is to submit your feasibility study to recipient country's finance Department for approving of issuing to our Chinese banks, most of the case of China Eximbank, sovereign guarantee.
List of recently signed government concessional projects through our arrangement
In order to give you an idea what we can offer of financial support or loan to foreign project, here we list some examples signed in 2006 within Sinomach or its subsidiaries.
  1. Export-Import Bank of China and the Ministry of Finance of Kenya signed an agreement at the Ministry of Finance of Kenya in Nairobi, granting preferential loans to the Kenya city electricity network reconstruction project undertaken by CAMC affiliated to SINOMACH.
The project was initiated by the Kenya government with an aim to promote agricultural and economic development. It includes 183.5 kilometers long of 132kV transmission lines, 76 kilometers long of 33kV distribution lines and 2 23MVA 132/33kV transformer substations.
   2. CAMC under SINOMACH signed contract with Kyrgyzstan South Kirghizia Cement Group about the Kyzyl-Kyja cement factory project in Beijing on April 12. This is the first business contract after the Chinese government offered 900 million dollars of preferential export under buyer’s credit. It is also the first large-scale cement project undertaken by China in the form of EPC in Middle Asia.
3. Heads of State of China and Senegal attended the signing ceremony of the Senegalese government information network project undertaken by CMEC
The signing ceremony of the Senegalese government information network project undertaken by China National Machinery & Equipment Import & Export Corporation (CMEC) affiliated to China National Machinery Industry Corporation (SINOMACH) was held in the Great Hall of the People on June 22. Hu Jintao, President of China, Abdoulaye Wade, President of Senegal, Tang Jiaxuan, State Councilor of China and other Senegalese government officials attended the ceremony.
The Senegalese government information network project is the largest trade and economic cooperation between China and Senegal since the two countries reestablished diplomatic relations. The implementation of this project symbolizes that China’s high-tech informational equipment entering the international market for the first time. The Senegalese government work will be computerize and integrated into network upon the completion of the project. Efficiency and quality of service of the Senegalese government will be greatly enhanced and the Senegalese will have easier access to relevant information.
4. The signing ceremony of Trinidad-Tobago aluminum factory project undertaken by CMEC under SINOMACH was held at Hilton Hotel in Port-of-Spain, capital of Trinidad-Tobago on December 12, 2005. This is the largest international project undertaken by China in Central America and Caribbean areas.
Trinidad-Tobago aluminum factory project was undertaken by CMEC in the form of EPC. The output of liquid aluminum will reach 125,000 tons annually after the project is put into use. The total contract valued at 465 millioins USD.
5. (CHMC) to provide electromechanical devices for CUA DAT hydropower station in Vietnam.
China National Heavy Machinery Corporation (CHMC) signed a contract with its Vietnamese counterparts in Hanoi to provide electromechanical devices for CUA DAT hydropower station as EPC, which is one of the top 10 national projects in Vietnam. The contract includes team design, manufacturing, supplying, transportation, installation, field erection, testing of 2×48.5MW electromechanical devices as well as technical training.
6. CMEC and Electric Bureau of Senegal has signed a frame contract for CMEC as EPC for Senegal's Dakar Around City Power Transmission Project. This project is the key project in Senegal and also the Second project between the two nations ever since both nations established formal diplomatic relation in 2005. The project includes 30KM around city power transmission lines of 90kv, four units of 90/30kv substation and auxiliaries with GIS system. The total is about 70 millions USD and will complete in 24 months.
7. Other financed projects include: 450 millions USD for power plant and transmission projects in Sri Lanka, 120 millions USD of telecommunication projects in Africa, 250 millions USD for railway project in Africa.
8. Last week in Sept. 22nd, 2007, CMEC has signed a concessional funded package of proejcts to Zimbabwe with contracted value of 600 millions.
 Now we are promoting this kind of China government preferential loans, which is with lower interest rate, long maturity period from 15 to 20 years, and longer grace period for construction time durance. All the terms can be negotiated when actual projects turn up.
If you are confident that you have the local resource or connection to be agent for recipient countries' preferential loan funded projects, please contact me at:
Yang Chun Lin
China National Electric Wire&Cable Imp./Exp. Corp.
Add: Rm.803, Building D, Shengshijiayuan Langjiayuan, 98 Jianguo Rd. Beijing, China 100022
We are EPC contractor and supplier of global power generation, transmission and distribution
Tel: 0086-10-85805516 Fax: 0086-10-84568952 Mobile: 0086-13801218512

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