CRBC provides supplier’s credit for 835 km Brazzaville-Ouesso Section of the National Road 2 (RN2) Rehabilitation and Extension Project (Linked to Record ID#105740)

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 Road and Bridge Corporation (CRBC) for the 835 km Brazzaville-Ouesso Section of the National Road 2 (RN2) Rehabilitation and Extension Project. The face value and borrowing terms of the supplier’s credit are unknown. The purpose of the project is to pave a 14 km road from the Mikalou roundabout to the Djiri bridge along the RN2 and to pave Ragec slip road, which links theRN2 to the second northern exit from Brazzaville (over a distance of 2.8 km). CRBC is the EPC contractor responsible for project implementation. The Ragec slip road was opened to traffic on June 3, 2020. However, as of April 2024, the paving of the 14 km road from the Mikalou roundabout to the Djiri bridge was still not complete due to ‘austerity measures’ and a lack of funding. There are also clear indications that the supplier’s credit from CRBC financially underperformed vis-a-vis the original expectations of the creditor. In 2022, CSCEC and the Government of the Republic of Congo signed a debt rescheduling agreement in 2022, which rescheduled $140 million 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 [CRBC] 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.’