Equatorial+Guinea+Infrastructure+Projects

=China is Likely to Invest in Infrastructure Projects in Equatorial Guinea that Correlate with Their PNGSM Interest=

Executive Summary:
China is likely to invest in infrastructure projects in Equatorial Guinea that correspond to their PNGSM investments in the country. In Nov. 2006, Equatorial Guinea's President Teodor Obiang Nguema agreed to a non-concessional credit loan from China's Export Import (EXIM) Bank of USD 2 billion to complete a series of infrastructure projects, notably to improve and provide electricity to the Bata Harbor. In exchange, China's Unipec, the trading arm of China Petroleum and Chemical Corporation (Sinopec), will receive a contract for the delivery of 15,000 barrels per day of crude oil from Zafiro field for five years. More recently in 2012, Equatorial Guinea and China's Sinochem Group signed a preliminary agreement to export 11,000 barrels of oil per day in exchange for a credit from the China EXIM Bank. Gabriel Obiang Lima, Guinea's Minister of Mines, Industry, and Energy said that the credit would be used to electrify more cities and to complete the second construction phase of an industrial port.

Discussion:
In Nov. 2006, Equatorial Guinea received from China's EXIM Bank a non-concessional credit line of USD 2 billion to complete a series of infrastructure projects to improve and provide electricity to the Bata Harbor. The terms of the loan consisted of a 5.5 percent interest rate, a maturity of 5 years and a grace period of 2 years, and the loan is to be repaid in oil to the EXIM Bank. The repayment must be equal to 30 percent of the outstanding stock of debt. Also, Unipec received a contract for the delivery of 15,000 barrels per day of crude oil from the Zafiro field for a five year period.[|.]

On 29 Oct. 2010, Yunnan Overseas Investment Company signed a Memorandum of Cooperation on the Bata Natural Gas Power Plant Project with the government of Equatorial Guinea outlining the construction of a gas-powered power plant. The plant will be a 150-megawatt power plant costing approximately USD 1.4 billion. In order to finance the joint-venture arrangement, Equatorial Guinea will sell USD 1.4 billion worth of liquefied natural gas to China.

On 13 July 2012, the Equatorial Guinea and Sinochem signed a preliminary agreement to export 11,000 barrels of oil per day in exchange for a credit from the China EXIM Bank. Gabriel Obiang Lima, Guinea's Minister of Mines, Industry, and Energy said that the credit would be used to electrify more cities and to complete the second construction phase of an industrial port.

China Machinery Engineering Corporation (CMEC) || Rehabilitation of the Malabo City Power Grids || Misc. || CMEC, Sinohydro Corp. || Construction of Djibloho Hydro-power Station Transmission line || Misc. ||
 * Date: || Price (USD) || Location: || Key Chinese Companies Involved: || Description: || Corresponds To: ||
 * 2008 || 300 million || Malabo City || China EXIM Bank,
 * 2009 || 250 million ||  || China EXIM Bank,
 * 2009 ||  || Malabo || China EXIM Bank, CMEC || Expansion of the Malabo Power Plant || Misc. ||
 * 2010 || 300 million || Bata || China EXIM Bank, Sinohydro Corp. || Construction of public lighting systems || Misc. ||

** Analytic Confidence: **
Analytic confidence is medium. Source reliability ranges from medium to high. There is no conflict between sources. The analyst had low expertise on the subject, worked alone while also collaborating with a group, and did not use a structured analytic method. The subject is moderately complex and the deadline was moderately easy to meet.
 * Analyst:** RoseAnna Wright