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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. |
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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 |
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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. |
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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
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Industrial
Such as manufacturing, mining etc.
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Social welfare
Such 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 |
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The project should be technically feasible and can generate favorable economic returns |
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The project should have good social benefits |
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Chinese enterprises should be selected as contractor/exporter |
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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).
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Loan Currency
The loan is denominated in Renminbi Yuan
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Borrower
Borrower is normally the Government of the Borrowing Country represented by Ministry of Finance
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Interest Rate and Maturity Period
Interest Rate and Maturity Period are Fixed by Chinese Government and stipulated in inter-governmental framework agreement
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Maturity Period
Maturity Period includes Grace Period and Repayment Period
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Grace Period
In Grace Period, the borrower shall pay the interest but no principal
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Availability Period = Drawdown period
Borrower can make drawdown within Availability Period. The Availability Period is included in the Grace Period and matches the implementation period of the project.
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Interest payment
Interest is calculated and paid semi-annually. Interest collection dates are fixed on March 21st and September 21st every year.
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Principal repayment
In repayment period, the principal is repaid semi-annually in equal installments. Principal repayment dates are fixed on March 21st and September 21st every year
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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
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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 |
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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 |
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Reports results to the Chinese Government |
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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 |
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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 |
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Implementation is essentially the obligation of the Borrower and the executing agency |
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China Eximbank monitors the implementation to ensure the efficient use of funds |
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The Borrower reports to China Eximbank progress of project, use of funds and provides necessary assistance |
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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. |
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The Borrower has the obligation to pay interest and fees and repay the principal according to the provision of Loan Agreement. |
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After a period of operation, China Eximbank makes Ex-post evaluation on the project on a case by case basis.
Disbursement Procedures
Contact Information
Concessional Loan Department
The Export-Import Bank of China
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