Sicomines borrows $1.77 billion — via pre-financing arrangement with CREC, Sinohydro, and Zhejiang Huayou Cobalt — for unspecified purposes

📋 Staff Comments

1. A pre-export finance (PXF) facility is an arrangement in which a commodity producer gets up-front cash from a customer in return for a promise to repay the customer with that commodity (possibly at a discount) in the future. PXF funds may be advanced by a lender or syndicate of lenders to a commodity producer to assist the company in meeting either its working capital needs (for example, to cover the purchase of raw materials and costs associated with processing, storage and transport) or its capital investment needs (for example, investment in plant and machinery and other elements of infrastructure). PXF facilities are usually secured by (1) an assignment of rights by the producer under an ‘offtake contract’ (i.e., a sale and purchase contract between the producer and a buyer of that producer of goods or commodities), and (2) a collection account charge over a bank account into which proceeds due to the producer from the buyer of the goods or commodities under the offtake contract are credited. There are two key documents in prepayment finance transactions: a contract providing for the advance payment by the offtaker to the producer for the purchase of goods/commodities (the 'Prepayment Contract'), and a loan agreement between a lender and the offtaker (the 'Offtaker Loan Agreement') under which the advance payment is financed.
2. Générale des Carrières et des Mine SARL (Gécamines SARL) is a Congolese state-owned mining company (parastatal).
3. The loan contract identification number is Contrat N.[2020]001. See https://www.dropbox.com/scl/fi/d14nkx7d1okvd47od3hls/RAPPORT-ITIE-RDC-2020-2021-Adopt-par-le-CE_23022023_V_Publi-e-1.pdf?rlkey=q44c92e12eibhhvwo2o6jva4q&dl=0.
4. One official source (https://www.dropbox.com/scl/fi/d14nkx7d1okvd47od3hls/RAPPORT-ITIE-RDC-2020-2021-Adopt-par-le-CE_23022023_V_Publi-e-1.pdf?rlkey=q44c92e12eibhhvwo2o6jva4q&dl=0) identifies the face value of the loan as $1,779,000,000 rather than $1,771,048,731.
5. This issue warrants further investigation.
6. It is unknown if Sicomines SARL contracted the loan with or without a sovereign guarantee. This issue warrants further investigation.
7. For loan and debt rescheduling records with variable interest rates, AidData calculates the all-in interest rate at T0 based on the reference rate (such as LIBOR or EURIBOR) on the loan start date, plus any known margin. Please see the methodology for additional details.
8. The 2020 borrowing is referenced in the fifth amendment to the Sicomines 'convention de collaboration' (Avenant No. 5 à la Convention de Collaboration Relative au Developpement d’un Projet Minier et d’un Projet d’Infrastructures en République Démocratique du Congo du 22 Avril 2008), which was signed on March 14, 2024. The fifth amendment can be accessed in its entirety via https://www.dropbox.com/scl/fi/sd5ma322ij0whn3wwsm4n/Avenant-n-5-la-convention-de-collaboration-relative-au-d-veloppement-d-un-projet-minier-et-d-un-projet-d-infrastructure-en-RDC-du-20-Avril-2008.pdf?rlkey=mh9scmmik01uqu5l8ootypel3&dl=0.

📚 Sources & References

• CONCLUSIONS DE L’INSPECTION GENERALE DES FINANCES SUR LA CONVENTION DE COLLABORATION D’AVRIL 2008 ENTRE LA RDC ET LE GROUPEMENT D’ENTREPRISES CHINOISES (CONTRAT CHINOIS)
• EXIGENCES DE L’INSPECTION GENERALE DES FINANCES AU REGARD DE SES CONCLUSIONS SUR LE CONTRAT CHINOIS
• Observatoire de la Dépense Publique COMMUNIQUE N°003/ODEP/AOÛT/2023
• SYNTHESE DU RAPPORT DE CONTROLE DE L'INSPECTION GENERALE DES FINANCES SUR LA GESTION DE LA GECAMINES
• RAPPORT ITIE-RDC EXERCICES 2020-2021 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.