# f. RBLs by interest rates and fees

We could only identify information on the interest rate for 17 of the 30 cases surveyed. 7 of these have fixed rates, while 10 have floating interest rates.

To the extent that interest rate information was available, Chinese policy banks offered fixed interest rates as low as 0.25 percent on RBLs, as in the case of a 2009 loan made by China Eximbank to the Republic of Congo [#18]. Interest rates were as high as 2 percent in Niger and Zimbabwe. Among the RBLs reviewed, all fixed interest rate RBLs made by Chinese lenders were made by China Eximbank. Floating interest rates generally use the London Inter-bank Offered Rate (LIBOR) as the reference rate, with rates ranging from Libor+ 1.0 percent [#9] to Libor+ 2.95 percent [#14]. The Korean loan to the DRC has the lowest weighted interest rate in our data set with 0.01% [#10].

We only have interest rate data for commodity trader loans in the case of the two Glencore loans to Chad which had an interest rate initially set at Libor+6.6% and Libor+6.625% [#7] & [#8]. These loans were first renegotiated in 2015, when they were combined, their maturities were extended and their interest rate was adjusted to Libor+6.75%. The second renegotiation happened in 2018, when the base interest spread was set at 2% until 2021, and 3% thereafter (+ additional 2% of deferred interest payments).24 We have little information on fees. Ghana’s 2018 RBL from Sinohydro [#15] reveals that on top of an annual interest of LIBOR + 2.8 percent, there is also a requirement to pay a flat management fee of 0.7 percent, a commitment fee of 0.5 percent per annum and a one-time China Export and Credit Insurance Corporation (Sinosure) premium of 7 percent. The loan in Guinea [#16] attracts a management fee of 0.5% while that in Niger [#17] of 0.25%. The Glencore-Chad loan involved fees for a total of USD37 million plus 0.75 % annual fee on any outstanding amount, later lowered to USD 0.6 million [#7] & [#8].

We analyze how the rates of these loans compare to traditional loans in section 5/c. Given that data on fees is not systematic, these are not analyzed.

# g. Repayment schedules

In seven cases we observe RBLs with repayments set to yearly, quarterly or a daily volume of commodities used to service the loan. These repayment volumes are converted into their monetary value based on market prices and deducted from the total outstanding loan amounts. In some cases, the annual repayments change, with less to be repaid in earlier years. Some set a range of volumes (e.g., 150,000 to 200,000 barrels per day or up to up to 40,000 metric tons of cocoa). Some of these RBLs may require higher volumes within the set range to be shipped when prices are low, but still effectively cap the repayment value.

In some cases (especially RDA deals) the loan is to be repaid from a designated commodity income stream (or a percentage of it) and repayment speed depends on how much revenue is generated by that income stream. Examples of such earmarks include the Sicomines copper and cobalt mine in the DRC (85% of mine profits), the Agadem revenues in Niger (the government’s share of oil revenues) and the Badoit project in Chad (a fraction of profit oil and royalty oil).

> 24 See EITI 2018 report for further details. http://itie-tchad.org/wp-content/uploads/2020/12/Rapport-ITIE-Tchad-2018sign%C3%A9.pdf

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