Chinese Bank Imposes Loan Conditions

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Exim Bank of China is willing to put up 25% of the money toward building the Reventazon hydroelectric project--as long as a Chinese construction company gets a piece of the action.

According to ICE's plan, 12 other banks in various countries would loan the other 75% of the money. This information was revealed in a recent interview of new ICE president Teofilo de la Torre with the newspaper La Nacion.

If such a condition had been placed on a loan from a U.S. bank during the last century, leftist university students would have taken to the streets to protest "Yankee imperialism."

A Chinese company, the Asian electrical generation giant Sinohydro, has expressed interest in participating in building the 305 megawatt generation. The firm is a growing presence in Latin America in Honduras and Ecuador.

In Honduras, the company has the contract to develop the 150 megawatt plant at Patuca III. There, Eximbank is giving $300 million in credit toward a total cost of $350 million. The bank also piggybacked Sinohydro in Ecuador.

ICE officials say that, previously, Brazil's Electrobras company was interested in participating in the dam but interest cooled.

De la Torre says they are analyzing other conditions of loans. But loans from the other 12 banks, including the InterAmerican Development Bank, that will finance 3/4 of the project, are firm, officials say. A quarter of the project is already complete.

Just how such a deal as Eximbank proposes would square with Costa Rica's complicated bidding system is unclear. ICE has already opened bids on purchase of turbines and generators.

De la Torre has said that financing of the El Diquis hydroelectric dam is "more complex" and the power company will concentrate on that after the Reventazon project is completely covered.

China takes care of its own, as was demonstrated when former President Oscar Arias accepted a "gift" of a new National Stadium from the Chinese government. The stadium was built by a Chinese contractor using only imported Chinese labor.