Active Mixed AidData Chinese Aid

CSCEC provides supplier’s credit for 835 km Brazzaville-Ouesso Section of the National Road 2 (RN2) Rehabilitation and Extension Project (Linked to Record ID#105703)

$450M USD

Funder	China State Construction Engineering Corporation (CSCEC)
Recipient Organization	Government of Republic of Congo
Country	Congo
Start Date	Dec 10, 2020
End Date	Mar 06, 2029
Duration	3,008 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`105657`

Grant Description

CSCEC provides supplier’s credit for 835 km Brazzaville-Ouesso Section of the National Road 2 (RN2) Rehabilitation and Extension Project 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).

📋 Loan / Grant Terms

💰 Loan Amountare unknown

The purpose of the project was to rehabilitate and extend several components of the 835 km Brazzaville-Ouesso Section of the National Road 2 (RN2), including the Djiri-Ingah component, the Ingah-Etsouali component, the Etsouali-Oyonfoula component, and the Oyonfoula-Gamboma component. CSCEC was the EPC contractor responsible for project implementation.

On February 1, 2020, the Congolese Minister in charge of Regional Planning and Major Works, Jean Jacques Bouya, confirmed that implementation of the project’s Djiri-Ingah component was underway.

Then, in 2024, the Congolese Government reported to the United Nations that the Djiri-Ingah component and other components of the 835 km Brazzaville-Ouesso Section of the National Road 2 (RN2) Rehabilitation and Extension Project had reached completion.

However, there are clear indications that the supplier’s credit from CSCEC 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 (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

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.
The concession agreement can be accessed in its entirety via https://www.sgg.cg/JO/2019/congo-jo-2019-01-sp.pdf. and https://www.dropbox.com/scl/fi/oe7gaeurav4tbgu5aasxk/congo-jo-2019-01-sp.pdf?rlkey=ij03erz30wszc0yt64010rqfu&st=otwbv79o&dl=03. The face value of the supplier’s credit is unknown. For the time being, AidData assumes that the face value was equivalent to the principal arrears rescheduled in 2022 (CFA 450 billion). This issue warrants further investigation.
There is some circumstantial evidence that suggests the financial commitment year may have been 2019 rather than 2020. The World Bank's International Debt Statistics (IDS) identifies the Congolese Government as having principal arrears to 'private' Chinese creditors worth $1,154,435,000 by 2019 (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). This issue warrants further investigation.

📚 Sources & References

Bulletin statistique de la dette publique
Congo/Chine : La Chine, amie de Sassou Nguesso ou amie du Peuple congolais ?
Des entreprises chinoises réaffectent le remboursement de leurs créances dans de nouveaux projets au Congo
Documentation, https://www.finances.gouv.cg/sites/default/files/documents/rapport%20dette%20publique%202020.pdf
IDS Principal and Interest Amounts Rescheduled 14 July 2024
IMF Country Reports - Republic of Congo: 2021 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for the Republic of Congo
JOURNAL OFFICIEL DE LA REPUBLIQUE DU CONGO paraissant le jeudi de chaque semaine à Brazzaville
Partenariat public-privé : Signature d’actes d’engagement pour la relance de l’économie
Principal and interest arrears of ROC to Chinese commercial creditors IDS July 2024
Rapport N°92 de la Commission Economie et Finances Relatif au Debat d'Orientation Budgetaire
RAPPORT SUR LA DETTE 2022
REPUBLIC OF CONGO FOURTH REVIEW UNDER THE THREE-YEAR ARRANGEMENT UNDER THE EXTENDED CREDIT FACILITY
REQUESTS FOR MODIFICATION OF PERFORMANCE CRITERIA
WAIVERS OF NONOBSERVANCE OF PERFORMANCE CRITERIA
AND FINANCING ASSURANCES REVIEW—PRESS RELEASE; STAFF REPORT; DEBT SUSTAINABILITY ANALYSIS; SUPPLEMENTARY INFORMATION; AND STATEMENT BY THE EXECUTIVE DIRECTOR
Republic of Congo Joint World Bank-IMF Debt Sustainability Analysis
REQUEST FOR A THREE-YEAR ARRANGEMENT UNDER THE EXTED CREDIT FACILITY—PRESS RELEASE; STAFF REPORT; AND STATEMENT BY THE EXECUTIVE DIRECTOR FOR THE REPUBLIC OF CONGO
RN2 : Jean Jacques Bouya optimiste
Route nationale n°2 : le tronçon Djiri-Ingah en pleine réhabilitation
Signature d’un acte d’engagement pour la réalisation des projets dans les domaines agricole et d’infrastructures
Transport : lancement de la concession des routes nationales I et II
Trois sociétés chinoises s’engagent à relancer les projets au Congo _ Ministry of Development Territorial Equipment and Major Works
UN General Assembly National report submitted pursuant to Human Rights Council resolutions 5/1 and 16/21* Congo
刚果（布）2号公路涵洞修复工程及金德磊大学城水毁工程通过最终验收 Loan applications and disbursements are still being received and processed as the projects continue to evolve. Ongoing monitoring and evaluation are in place to ensure project continuity.

All Grantees

Government of Republic of Congo

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