Narrative
Full Description
Project narrative
The Congolese authorities first announced its intention to concession National Road 1 (RN1) and National Road 2 (RN2) on February 6, 2016. La Congolaise des Routes S.A. [LCR or (刚果（布）国家1号公路特许经营项目公司] — a special purpose vehicle and joint venture between CSCEC (70% ownership stake), Egis Projects (15% ownership stake) and the Congolese Government (15% ownership stake) — passed the pre-qualification stage in June 2016 and submitted a technical and financial proposal in February 2017. It then received a ‘priority negotiation invitation letter’ in November 2017. Negotiations between LCR and the Congolese Government took place between December 2017 and April 2018. The parties finalized and signed a 30-year concession (franchise) agreement at the FOCAC Summit in September 2018. Then, on December 10, 2020, the Government of the Republic of Congo signed a supplier’s credit agreement with China State Construction Engineering Corporation (CSCEC) for the 835 km Brazzaville-Ouesso Section of the National Road 2 (RN2) Rehabilitation and Extension Project (captured via Record ID#105657). The face value and borrowing terms of the supplier’s credit are unknown. However, it is known that CSCEC and the Government of the Republic of Congo signed a debt rescheduling agreement in 2022 (captured via Record ID#105703), which rescheduled CFA 450 billion ($1 billion) of outstanding debt (principal arrears) under the supplier’s credit agreement. According to IMF Country Report No. 23/89, the rescheduling agreement provided for a ‘regularization of arrears with [CSCEC] which involved converting the original CFA franc debt into U.S. dollars […].’ The same report notes that the arrangement was subsequently ‘unwound—corrected by reconverting the debt back into CFA francs.’
Staff comments
1. The French project title is La route nationale n°2, Brazzaville-Ouesso or Les travaux d'élargissement et de réhabilitation de la RN2 or Travaux d’urgence et de viabilisation sur la Route Nationale n°2 (RN2) et plus précisément dans ses tronçons Djiri-Ingah; Ingah-Etsouali; Etsouali-Oyonfoula et Oyonfoula-Gamboma. 2. According to the World Bank’s International Debt Statistics (IDS), the Congolese Government had principal arrears to ‘private’ Chinese creditors worth $1,171,780,000 in 2021 and $49,802,000 in 2022 (see https://www.dropbox.com/scl/fi/g54lg0kqd2rg6tirlt59f/Principal-and-interest-arrears-of-ROC-to-Chinese-commercial-creditors-IDS-July-2024.xlsx?rlkey=rv0r2kfzw3reyyxl5ekpcl0b0&dl=0). 3. According to the World Bank’s International Debt Statistics (IDS), the Congolese Government and its ‘private’ Chinese creditors rescheduled principal repayment obligations worth $1,146,879,000 in 2022 (see https://www.dropbox.com/scl/fi/shqo5w418nwvocuiibhn8/IDS-Principal-and-Interest-Amounts-Rescheduled-14-July-2024.xlsx?rlkey=6mka34nyg2qpwd7lvgfxz6x87&dl=0). $1,146,879,000 is roughly equivalent to the sum of the values of two debt treatments that are identified in the February 2023 World Bank-IMF Debt Sustainability Analysis for Congo-Brazzaville (https://documents1.worldbank.org/curated/en/099220503022313177/pdf/BOSIB08f099df703e0b0540dd698cc66f60.pdf) and the Congolese Ministry of Finance’s 2022 Public Debt Report (https://web.archive.org/web/20240605224117/https://www.finances.gouv.cg/sites/default/files/documents/Rapport%20sur%20la%20dette%202022%20V4.pdf): a $1 billion (CFA 450 billion) debt rescheduling with China State Construction Engineering Corporation (CSCEC) and a $140 million debt rescheduling with China Road and Bridge Corporation (CRBC). 4. The concession agreement can be accessed in its entirety via https://www.sgg.cg/JO/2019/congo-jo-2019-01-sp.pdf