18 October 2007
Luanda — Angolan Finance Ministry Wednesday in Luanda denied any possible irregularities in the use of the funds released under the China Credit Line to finance the country's reconstruction and development.
"It was with stupefaction that the Finance Ministry took notice of vague reports on alleged abnormalities in the functioning of the China Credit Line, uttered by some relatives of ex-chiefs of the External Intelligence Services (SIE), during their trial", says a press release.
According to the release "for the seriousness of such unfounded utterances" reported by some Angolan media organs, the Finance Ministry feels the obligation to issue this communiqué, to explain to the institution of the State and to the public and private entities as a whole.
The source also states that the financial relations with the Republic of China started on November 28, 2003, following the signing between the Finance Ministry of Angola and the Ministry of Commerce of China of an accord that set the bases of a new economic and commercial cooperation between the two countries.
On March 2, 2004 the first Credit Accord with the Eximbank of China was signed for a financial package of two billion US Dollars and meant for the financing of projects of Angola's public investment, approved by a joint work team, in terms of the said accord.
The first package was implemented in two different phases, with each taking one billion US Dollars.
The first phase involved 27 contracts, corresponding to 50 projects, of which 21 have already been completed. These projects focused on areas of electricity, water, health, education, public works, each of which taking about 20 percent of the total amount released.
The second phase included 13 contracts and 52 projects that are underway. These contracts are in the areas of telecommunications, fisheries, health, education and public works.
A contract is near approval to complete the second phase. The contract is called EDEL III, plus another two in final stage of negotiation, also in the sector of electricity and waters.
The balance at the end of September 2007, according to the Finance Ministry, is of Usd 7.1 million, of which Usd 1.6 million are for the first phase of the financing and Usd 5.4 million for the second phase.
The total amount disbursed until the end of September is Usd 932.9 million, being 733.1 million for the first phase and 199.8 for the second phase.
As a result of the positive evaluation made by the two parties concerning the first package of two billion US Dollars, a memorandum of understanding was signed on June 20, 2006, between the Angolan Finance Ministry and China's Eximbank, for the granting of a new financing of the same amount.
The communique recalls that, according to procedures agreed up and in force under the credit line, the disbursements, that is the utilisation of the funds, can only be effected on orders from the Finance Ministry, based on invoices presented by the contractors and stamped by the owner of the work and respective supervisors.
The disbursements are remitted directly to the contractors accounts. On the other hand, these disbursements lead to the recording of the debt with the Finance Ministry and Reserve Bank (BNA).
According to the Finance Ministry, there is no way funds can be embezzled or used in an irregular way.
In the search for partnerships for huge national reconstruction projects, the China International Fund was established in 2005, based in Hong-Kong, with the purpose of creating facilities or credit lines to finance projects under the National Reconstruction Office and obtain new funds in competitive terms.
The first facility organised by the China International Fund amounting to Usd 2,9 billion, enabled the start of the implementation of projects approved in due time by the Cabinet Council, namely the new Luanda International Airport, the new railways, the Luanda-Lobito, Malanje-Sourim, Sourim-Dondo and Saurimo-Luena roads.
The Luanda drainage infrastructures and studies and project of the new capital city are also part of the package of projects. Alike in the China Eximbank facility, here again the disbursements are remitted directly to contractors and Chinese suppliers.
Meanwhile, because of some constraints linked to the Chaina International Fund, in mobilising funds to complete the projects underway and start another ones, the Government decided to instruct the Finance Ministry to seek funds from the local market. This led to the acquisition of Usd 3.5 billion to cover the continuation of the main programmes of the National Reconstruction Office.
Therefore, the Finance Ministry considers that the allegations calling into question the use of the funds from China's Credit Line are but "gossip and pure slander and speculation".
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