Monday, October 19, 2015

Whatever Happened to the $9 Billion China-Congo Deal?

Sicomines photo credit: http://www.forumdesas.org
Bloomberg has a story today that updates the China-DR Congo Sicomines Tale -- the long-running story of an investment and resource-backed loan deal first mooted around 2004, and still not in production. This is the formerly $9 billion+ 2007 deal that had the World Bank and the IMF in an uproar, concerned about the DRC's taking on additional sovereign debt just when it was asking to have its World Bank/IMF loans cancelled under the HIPC program. Under pressure from the IFIs, the deal was eventually scaled back (in 2009) from two to one $3 billion line of China Eximbank credit, backed by future copper exports, plus a complicated financing deal to bring the abandoned copper mine back on line. (This was estimated to cost at least an additional $3 billion). The sovereign guarantee was also dropped. And what is the status today?

Moise Ekanga, executive secretary of the Office for the Coordination and Monitoring of the Sino-Congolese Programme, announced that the DRC had received "$1.5 billion for Sicomines and infrastructure projects including road construction and hospitals, but funding and implementation have been more difficult than expected ... with projects having faced long delays."

A long-mooted hydropower project, Busanga, is now to be financed out of the copper-backed credit line (50%), with the Chinese partners in Sicomines providing the rest. And Sicomines is expected to produce its first copper cathodes by the end of October. Only seven years after the deal was signed.

h/t to China Africa Project

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