LOANS TO DRC FROM CHINA, INDIA, KUWAIT

UNCLAS KINSHASA 001731 SIPDIS SENSITIVE SIPDIS E.O. 12958: N/A TAGS: EFIN EAID ETRD EMIN PGOV CG CH IN KU SUBJECT: LOANS TO DRC FROM CHINA, INDIA, KUWAIT REF: A. SECSTATE 106631 ¶B. KINSHASA 1621 ¶1. (SBU) Post submits the following in response to reftel A's request for information on new lending from emerging bilateral creditors. The GDRC's bilateral lending agreements include China, India and Kuwait, although detailed information about the loans is difficult to obtain. (Note: Even the IMF mission in Kinshasa has been unsuccessful in determining the overall levels of Chinese, Indian and other non-permanent Paris Club country loans, grants and other investments. End note.) CHINA -------------- ¶2. (U) A state-owned Chinese company, COVEC (China National Overseas Engineering Company),has loaned Gecamines, the DRC's copper/cobalt mining parastatal, USD 60 million as part of a transaction to reopen Luisha, a Katanga copper mine (reftel B). COVEC has a 72 percent share in the joint venture with Gecamines. ¶3. (U) Purusant to a framework agreement Minister of Finance Marco Banguli signed September 7, the Government of China agreed to loan the GDRC USD 32 million to fund the development of a GSM network that will support the nationwide growth of Congo China Telecom, a Chinese company. The 15-year loan has a two percent annual interest rate and an initial five-year repayment grace period. INDIA -------------- ¶4. (U) Pursuant to an August 2005 bilateral agreement, the Government of India extended to the GDRC USD 33.5 million in export financing credit, and according to a Ministry of Finance contact, the interest rate is less than 1.5 percent. The agreement earmarks USD 12.5 million for the purchase of buses from Tata Motors (an Indian company that is part of the conglomerate Tata Group),USD 13 million to construct a cement plant in Orientale province, USD 6 million for rehabilitation of a manganese mine, USD 2 million for the purchase of equipment for MIBA (the DRC's diamond mining parastatal) and other infrastructure and agriculture projects, such as the rehabilitation of a sugar plant in Kisangani, Orientale province. KUWAIT -------------- ¶5. (U) The Government of Kuwait, through the Kuwait Fund of Arab Economic Development, has signed a loan agreement with the GDRC for approximately USD 14.9 million, for the financing of a road project. MEECE