Active Mixed AidData Chinese Aid

Sicomines provides $50 million loan to Gécamines for workshop rehabilitation activities

$50M USD

Funder	Sino-Congolais des Mines (Sicomines SARL)
Recipient Organization	Gecamines S.A.
Country	Democratic Republic of the Congo
Start Date	Apr 22, 2008
End Date	Mar 02, 2033
Duration	9,080 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`91873`

Grant Description

Sicomines provides $50 million loan to Gécamines for workshop rehabilitation activities On September 17, 2007, a consortium consisting of China Eximbank, China Railways Construction Company (CREC), and Sinohydro and the Government of the Democratic Republic of Congo signed a “protocol d’accord” (or “项目换资源协议”).

According to the terms of the agreement, CREC and Sinohydro would be granted a 68 percent stake in a new joint venture (JV) named the Sino-Congolais des Mines (Sicomines SARL), and a Congolese parastatal called Générale des Carrières et des Mine SARL (Gécamines SARL) would own the other 32 percent.

However, on April 22, 2008, a “convention de collaboration” (Chinese name: 关于刚果民主共和国矿业开发和基础设施建设的合作协议) was signed by the Government of the DRC and Sinohydro (on behalf of Sicomines).

It specified that ownership of the Sicomines joint venture would be allocated such that CREC holds 43% ownership of the joint venture, Sinohydro holds 25%, Gécamines holds 20%, and a Mr. Gilbert Kalam Babanika (who was eventually appointed as deputy head of Sicomines) holds 12%.

On the same day (April 22, 2008), Sicomines SARL issued a $50 million loan to Gécamines SARL for the rehabilitation of three workshops: one in the West (AO), one of the Center (ACP) and one in Lubumbashi (LC).

📋 Loan / Grant Terms

💰 Loan Amountcarried a 15-year maturity and a 3

📅 Maturity15 years

💹 Interest Rate3.5%

Cumulative interest repayments amounted to $7,908,082 and cumulative principal repayments amounted to $16,882,723 as of December 31, 2021 and December 31, 2022.

The borrower was in interest arrears worth $1,750,000 as of December 31, 2019, $1,445,648 as of December 31, 2021, and $2,604,754 as of December 31, 2022. The loan's principal amount outstanding was $33,117,277 as of December 31, 2021 and December 31, 2022.

Then, on January 12, 2018, Sicomines SARL issued a $32 million loan to Gécamines SARL to finance its equity contribution to (equity stake in) Sicomines SARL. This loan carried an interest rate of 12-month LIBOR plus a 1% margin.

As of December 31, 2019, the outstanding balance of this loan (including interest) was $10,620,198 and the borrower was in interest arrears (worth $307,700).

📋 Staff Comments

On June 28, 2008, an amendment to the April 22, 2008 “convention de collaboration” was signed, which change the ownership allocation to CREC: 28%, Sinohydro: 20%, China Metallurgical Group Corporation: 20%, Gécamines: 20%, Mr. Gilbert Kalam Babanika: 12%. On September 11, 2008, a second amendment was signed, which further changed the ownership allocation to CREC: 33%, Sinohydro: 30%, Zhejiang Huayou Cobalt: 5%, Gécamines: 20%, Mr. Gilbert Kalam Babanika: 12%.
The French project title is Réhabilitation des ateliers de l'Ouest (AO), du Centre (ACP) et de Lubumbashi (LC).
Neither the $50 million Sicomines SARL loan nor the $32 million Sicomines SARL loan are included in the Chinese Loans to Africa (CLA) database that SAIS-CARI released in 2021 (which is now maintained by Boston University's Global Development Policy Center).
Générale des Carrières et des Mine SARL (Gécamines SARL) is a Congolese state-owned mining company (parastatal).
AidData has estimated the all-in interest rate that applies to the $32 million loan by adding 1% to the average 12-month LIBOR rate in January 2018 (2.196%).
In 2021, this loan was offset with a portion of dividends distributed in 2020. (En 2021, cet emprunt a été compensé avec une partie de dividendes distribués en 2020.) See https://www.gecamines.cd/wp-content/uploads/2023/12/ETATS-FINANCIERS-GCM-AGO-2022.pdf7. The Congolese Ministry of Finance classifies the outstanding loan repayment obligations of Gecamines to Sicomines SARL as a source of internal debt rather than a source of external debt. See https://dgdp-rdc.org/wp-content/uploads/2023/05/Addendum-Rapport-2021.pdf

📚 Sources & References

RAPPORT_ASSOUPLI_ITIE_RDC_2018_2019_1er_Semestre_2020_Adopté, rapport assoupliitie
Etats Financiers 2020, la generale des carrieres et des mines sa
ETATS Financiers
ETATS FINANCIERS EXERCICE 2022, 2021 Annual Report Public Debt Addendum
Chinese aid, trade and investment and the forests of the Democratic Republic of Congo
Etude d’évaluation de la mise en œuvre de la convention de collaboration relative au développement d’un projet minier et d’un projet d’infrastructures en RD Congo Projet SICOMINES 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.