Government to finance DR Congo despite hitch

Tue Nov 24, 2009 11:17pm EST
 
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By Joe Bavier and Anna Willard

KINSHASA/PARIS (Reuters) - The Democratic Republic of Congo on Tuesday accused Canada of holding up progress toward rescheduling its foreign debt but Ottawa said it was now prepared to provide the needed financing assurances.

The Central African nation said the dispute centered on a mining contract it had canceled but it was not right for Canada to delay its debt refinancing.

In response, Canada said it had asked for more time to consult "on the current investment environment" in Congo but that after its consultations it was now ready to proceed.

The International Monetary Fund said this month Congo must make arrangements on the rescheduling of its debt with the Paris Club of creditor nations before it could qualify to enter a global debt relief program.

A source from the Paris Club said a deal could be reached in the coming days and it was not the correct forum for a discussion on the business climate of any particular country.

Congo is estimated to have $10 billion to $11 billion in foreign debt. At the end of September 2008, it owed $6.1 billion to the 19 developed countries who are members of the Paris Club and had fallen behind on its repayments.

Talks with the Paris Club creditors were held this week, but Congo said they had become snagged over its decision in August to cancel a copper and cobalt project. Toronto-listed First Quantum Minerals was the majority shareholder in the project.

The Canadians "have a problem with what's happened with a Canadian company, KMT," Information Minister Lambert Mende said of First Quantum's Kingamyambo Musonoi Tailings (KMT) unit. "The Canadian government wants to use the Paris Club in order to resolve a particular problem. This is unacceptable."   Continued...