China to lend Congo $5bn in latest Africa foray
Kinshasa, September 18, 2007
China plans to lend the Democratic Republic of Congo $5 billion to modernise its decrepit infrastructure and rich but deteriorated mining sector.
Under a draft accord signed on Monday, Beijing earmarked the funds for major road and rail construction projects and for rehabilitation of Congo's mining sector, a treasure chest of copper, cobalt, gold and diamonds still to be fully tapped.
The repayment terms proposed included mining concessions and toll revenue deals to be given to Chinese companies, Congolese Infrastructure and Public Works Minister Pierre Lumbi said.
"This agreement will allow us to carry out important large-scale projects," he told Reuters on Tuesday.
"What we have are repayment methods in terms of mining concessions, but also others like toll revenues," he added.
If fully disbursed, the loan will be one of the biggest Chinese financial commitments on the African continent.
In recent years the Asian economic giant has been sinking billions of dollars into energy, mining and infrastructure projects from Algeria to Angola.
Of the $5 billion total, $3 billion to be loaned in a first phase will cover big infrastructure projects, including a 3,400 km (2,125 mile) highway between the northeast city of Kisangani and Kasumbalesa on Congo's southern border with Zambia.
It also will cover construction of a 3,200 km (2,000 mile) railway to link the country's southern mining heartland to its western port of Matadi, with access to the Atlantic.
The first phase also covers plans to construct 31 hospitals, 145 health centres, and two universities.
The remaining $2 billion will go towards rehabilitating mineral-rich Congo's crumbling mining infrastructure and setting up joint ventures in the mines sector, according to the draft accord.
Following landmark elections in Congo held late last year and won by President Joseph Kabila, foreign mining companies have been scrambling for a stake in the Congolese mining sector, one of Africa's richest.
Kabila's government has launched a review of mining contracts to weed out suspect deals and negotiate new accords potentially more beneficial to the country.
The former Belgian colony, previously named Zaire, has seen its once mighty mining sector decimated by a series of wars and foreign invasions and by years of corruption, mismanagement and neglect under former dictator Mobutu Sese Seko. - Reuters