The Paris Club of creditor nations is in a position to conclude a rescheduling of Democratic Republic of Congo’s debt now that Canada has come onside with the move, a Canadian finance official said yesterday.
The International Monetary Fund said this month Congo must make arrangements on the rescheduling of its debt with the Paris Club before it could qualify to enter a global debt relief program.
Congo officials accused Canada of holding up the deal due to the Central African country’s recent decision to cancel a copper and cobalt project owned by Canadian company First Quantum Minerals.
Canada said it was asking for more time to consult “on the current investment environment” in the country, but said later in the day it was ready to proceed.
Asked yesterday, whether the Paris Group had a deal with Congo, a Canadian finance official said: “The fact that Canada is ready to provide its own financing assurances has enabled the Paris Club as a whole to be in a position to provide such financing assurances to the IMF.”
Congo is estimated to have $10 billion to $11 billion in foreign debt. At the end of September 2008, it owed $6.1 billion to the 19 developed countries who are members of the Paris Club and had fallen behind on its repayments.
Congo cancelled the $500 million Kolwezi project in the Katanga mining heartland following a broad government review of contracts deemed to have been struck under unfair terms, mostly during the chaos and corruption of a 1998-2003 war and the transitional government that followed.
The government has since said the contract could be renegotiated, while First Quantum has said it could seek international arbitration.
Canadian company Lundin Mining is also stuck in contract limbo as it and and its US partner Freeport-McMoRan Copper & Gold are in talks over the permit for their Tenke Fungurume copper and cobalt mine.
The country has yet to rule on the Tenke contract, and the mine is currently operating.
Pic: President Joseph Kabila of the Dep.Rep.Congo