Loans to Overseas Construction Contracts (the Loan) refer to the loans, either in Renminbi or foreign currencies, that the Bank provides to Chinese enterprises for financing their construction projects implemented in foreign countries, which may bring forth the export of Chinese equipment, machinery, building materials, technology, and labor services. The Loan is also applicable to Chinese contractors who win the tender in the international bidding on the projects financed by the World Bank, Asian Development Bank, and other international financial organizations.

Prospective Borrowers

Prospective borrowers of the Loan include Chinese enterprises that are

Qualifications for Loan Application

1. The borrower should demonstrate fine management and operations, have a sound financial position and a favorable credit standing, and should be capable of repaying the principal and interest incurred;

2. The borrower has already signed a contract for undertaking overseas construction projects, which, when necessary, should be accompanied with authorization and approval by competent government authorities;

3. The spin-off exports of Chinese equipment, materials, technology, labor service, and management services that derive from overseas construction contracts should account for no less than 15% of the total value of a specific project contracted;

4. The value of the overseas construction contract should be no less than USD 1 million, with advance payment amounting to no less than 15% of the total contract value in principle. In the case of deferred repayment, a payment guarantee should be provided as acceptable to the Bank;

5. The overseas construction contract shall be expected to offer satisfactory economic returns;

6. The contractor should have license and capability to perform the deal sealed;

7. The host country should remain stable both politically and economically;

8. In the case where repayment is assessed highly risky, appropriate export credit insurance should be arranged as per the requirements of the Bank;

9. Repayment guarantee acceptable to the Bank should be provided; and

10. Other requirement that the Bank deems to be of necessity.

Documents and Materials required for Loan Application

Documents and materials required for applying to the Bank for the Loan include:

1. Loan application;

2. The contract for the construction project and authorization and or approval by competent government authorities, if required;

3. Purchase contract and other commercial contracts related to the construction project;

4. Analysis of economic returns and the cash flow statement of the construction project that the borrower has signed to undertake;

5. A letter of intent for covering export credit insurance if such shall be deemed necessary;

6. The borrower's license for undertaking construction projects overseas, profile statements of both the borrower and the guarantor, a copy of the business license of the borrower having passed the annual examination, audited financial statements of the past three years and audited financial statements of the recent period of the current year, and other documents that demonstrate the credit standings and the operations of both the borrower and the guarantor;

7. Letter of intent for repayment guarantee, or in case of mortgage or pledge, valid certificates of ownership of the property under mortgage or pledge and evaluation reports thereof; and

8. Other relevant documents demanded by the Bank.