The World Bank says they are close to grant­ing debt relief to the Demo­c­ra­tic Repub­lic of Congo. The Bank hopes to grant the relief next spring, but is wait­ing on nego­ti­a­tions between Congo and China to complete.

The World Bank wants Congo to change a min­er­als for infra­struc­ture deal with China before giv­ing the debt relief. How­ever, chang­ing the deal could can­cel 3 bil­lion dol­lars of infra­struc­ture improve­ments to Congo.

From this Reuters arti­cle, writer Les­ley Wroughton explains this give and take that Congo has to do.

The relief would cover some $7 bil­lion of non-commercial loans from the IMF, World Bank and bilat­eral debt held bilat­er­ally with gov­ern­ments. The sav­ings to Congo would amount to $400 mil­lion a year in pay­ments.

Zoel­lick said there had been progress in talks between Congo and China on amend­ing a $9 bil­lion infrastructure-for-minerals deal, com­po­nents of which have held up the debt relief accord.

The Inter­na­tional Mon­e­tary Fund fears the con­tract, which uses Congo’s min­eral reserves as a guar­an­tee for infra­struc­ture projects, could plunge the cen­tral African nation deeper into debt and has delayed for­give­ness of most of the $10 bil­lion Congo already owes.

A mis­sion from the IMF is cur­rently in Congo.

Agreed early last year, the con­tract with China is a cor­ner­stone of Kabila’s post-conflict recon­struc­tion pol­icy fol­low­ing decades of dic­ta­tor­ship and a 1998–2003 war that left the for­mer Bel­gian colony’s infra­struc­ture in ruins.

The deal is com­prised of two phases of infra­struc­ture projects with a total price tag of $6 bil­lion aimed at reha­bil­i­tat­ing thou­sands of kilo­me­tres of road and rail con­nec­tions and con­struct­ing schools and hospitals.

An addi­tional $3 bil­lion is slot­ted toward devel­op­ing new Chi­nese cop­per and cobalt mines in Congo’s mineral-rich Katanga province, where reserves will serve to pay back the costs of those projects.

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