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 Road and Bridge Corporation (CRBC) for the 835 km Brazzaville-Ouesso Section of the National Road 2 (RN2) Rehabilitation and Extension Project (captured in Record ID #105739). The face value and borrowing terms of the supplier’s credit are unknown. However, it is known that CRBC 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 [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 Travaux d’urgence sur la Route Nationale n°2 à partir du rond-point Mikalou jusqu’au pont Djiri et sur la 2ème sortie nord de Brazzaville y compris la Brettelle Ragec or Mikalou-Pont Djiri, longue de 14 km, y compris Bretelle Ragec, longue de 2,8 km. 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.”