MAC: Mines and Communities

DRC eases off on China investment

Published by MAC on 2009-08-25
Source: Northern Miner (2009-08-18)

The Democratic Republic of Congo (DRC) has agreed to have a little bit less of China within its borders.

After being told by the International Monetary Fund (IMF) that it would qualify for more debt relief if some of the US$9 billion Chinese infrastructure for metals investment was eased off on, the country agreed to lower the total amount to US$6 billion.

The contract with the Chinese was set to use the country's mineral wealth as a guarantee for infrastructure projects that will no longer be the case however.

The IMF warned the DRC that the deal with the Chinese was constructed in such a way that it would result in more debt for the country as well as delay the forgiveness of most of the US$10 billion the DRC already owes.

The mover by the DRC's central bank to appease the IMF is expected to clear the way for the country to participate in a new three-year Heavily Indebted Poor Countries program that the organization launched in 1996.

The extent of debt relief the DRC will qualify for is not yet known.

The DRC has been counting on the Chinese infrastructure plan to help it rebuild after its 1998 to 2003 war.

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