Bosnia: China Exim Bank injects 667MEUR into Energy company for new TPP Unit project6. January 2015. / SEE Energy News
At the Meeting of the People’s Republic of China and the Central and Eastern European Countries (CEECs) in Belgrade, the Memorandum of Understanding on Financing the Project Block 7-450MW TPP “Tuzla” in BiH was signed between the Export-Import Bank of China, as the lender, and the Government of the Federation of Bosnia and Herzegovina, represented by the Federal Ministry of Finance, as the guarantor.
The Memorandum was signed by the Federal Minister of Finance Ante Krajina and the Governor of the Export Import Bank of China (EXIM) Li Ruogu.
– This memorandum means that the Government of the Federation BiH is ready to issue the so-called sovereign guarantee, i.e. this means that the Federation BiH will orderly settle its liabilities under this arrangement – the Minister Krajina told to the Agency Fena, adding that the credit line amounted to 667.802.500 EUR, and that, most likely, it would be converted into dollars.
The Memorandum was signed considering that, on 28th July 2014, the Ministry of Finance sent a letter in which they expressed their intention to seek support for financing the Project Block 7-450MW of the TPP “Tuzla” in BiH with a preferential buyer loan under more favourable conditions within the credit line of 10 billion USD for the Central and Eastern European countries which had been announced by the Government of the Republic of China in 2012.
The “Electric Power Industry of BiH”, as the purchaser, and the consortium consisting of the “China Gezhouba Group Company Limited” – CGGC (consortium leader) and “Guangdong Electric Power Design Institute” – GEDI (consortium member), entered into a commercial contract, and on 1st September 2014, the purchaser submitted the application for a preferential buyer loan under more favourable conditions by which the Bank is required to place at the purchaser’s disposal a loan of up to 667.802.500 EUR.
As it is written in the Memorandum, the parties have acknowledged that the Project has a high priority implementation plan with the support of the Council of Ministers of BiH, that it plays a key role in the development of the electric power industry in BiH and that it improves the economic and commercial cooperation between China and BiH.
In addition, in the Memorandum, the Bank confirms that the project complies with the Bank’s credit orientation, as well as that the Federal Ministry of Finance expresses its readiness and ability to ensure a loan repayment guarantee in the name of the purchaser, and that they declare that such guarantee conforms with the laws of BiH and the Federation of BiH.
In addition, the lender states that the participation of the Chinese content in the project will not be smaller than 50% of the net contract price, and that the financing structure and the loan conditions will be finally defined on the basis of an internal assessment and the approval of the Chinese government.
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