Shenzhen City, Administration of Utilization of Foreign Government Loans Measures

Promulgated: January 8 2002
Effective: as of date of promulgation
Applicability: "Foreign government loans" means long-term preferential low-interest or interest free loans taken out by the Ministry of Finance on behalf of the Chinese government, including loans from Nordic Investment Bank and Nordic Development Fund (Article 2).

Main contents: For administration purposes, projects financed with foreign government loans are divided into three types. Infrastructure or public welfare projects in which the city's finance bureau acts as borrower and those for which it acts as guarantor of foreign government loans are Type One and Type Two Projects; other projects are Type Three (Article 5). In terms of amount, projects for which foreign government loans of less than US$5 million are taken out can be approved by the city; projects financed with foreign government loans of more than US$5 million are subject to examination by the Ministry of Finance and the State Development Planning Commission (Article 8). On-lending of foreign government loans shall be handled by State policy banks, State-owned commercial banks or other banks or financial institutions approved by the Ministry of Finance (Article 16). For Type One Projects, the city's finance bureau shall recommend the on-lending bank and, if it is approved, enter into an on-lending agreement with it. The on-lending bank is not required to evaluate the project and may not change the terms of the loan (Article 17). For Type Two Projects, the borrower recommends the on-lending bank and the on-lending bank may, at its discretion and subject to confirmation by the Ministry of Finance, change the terms of the loan (Article 18). For Type Three Projects, the on-lending bank is required to conduct an independent evaluation of the project and determine the on-lending terms (Article 19).
Related legislation: State Council, Transmission of the Ministry of Finance and State Development Planning Commission, Further Strengthening the Administration of Foreign Government Loans Several Opinions Circular, 2000