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Projects

Project Brief

Summaries of proposed guarantees are provided prior to Board consideration and before final contract signing, and they are therefore subject to change. Project briefs are disclosed after Board consideration and contract signing and reflect the terms of the project at the time of contract signature. Environmental and Social Review Summaries are provided for projects assigned an Environmental Assessment Category of A or B.

 

Project name
Congo Equipment SPRL
Project ID
7147
Fiscal year
2008
Status
Active
Guarantee holder
Bartrac Equipment
Investor country
Mauritius
Host country
Congo, Democratic Republic of
Environmental category
B
Sector
Services
Gross exposure
 $25.0 million
Project type
Non-SIP

MIGA has issued a guarantee of $25 million to Bartrac Equipment covering its equity investment in and shareholder loan to Congo Equipment SPRL in the Democratic Republic of Congo (DRC). Bartrac Equipment is a joint venture between two Caterpillar dealers operating in Africa, Barloworld Equipment and Tractafric Equipment. MIGA’s guarantee is for up to 10 years and covers the risks of war and civil disturbance, transfer restriction, and expropriation.

The project involves the establishment of a dealership in the Katanga province of the DRC for the distribution and servicing of Caterpillar earth-moving and power generating equipment. The project will directly supply equipment suitable for the construction and rehabilitation of road and rail links, office and residential buildings, and power sector installations in the Katanga province. An office block, workshop facilities, and spare parts warehouse will be set up at Lubumbashi, provincial capital of Katanga Province, and Kolwezi, a mining town.

The project is designed to indirectly address the infrastructure needs of the DRC, which is in a very poor state following decades of conflicts and economic and political instability. The earth-moving equipment will help build the country's road network and tackle one of its biggest challenges—traveling between provinces. Increased availability of earth-moving equipment and maintenance services will help enhance efficiency and productivity in the mining sector, and is expected to encourage downstream growth.

The provision and wider availability of commercial trucks, earth-moving equipment, and related services to companies are expected to improve trade and contribute to increased economic activities in the country. Finally, the provision of small-scale generator sets will provide much needed power to firms and individuals that are either not currently hooked up to the national grid or experience frequent power outages.

The dealership workshops will provide on-site training for the operation and maintenance of machines to employees and customers, as well as off-site training in Europe, South Africa, and the US. The project is expected to generate tax revenues for the government, estimated at more than $2 million per year for the next five years. It will also contribute to the economy through local sourcing of goods and services, mostly related to transportation, fuel, utilities, and housing.

The project meets a number of MIGA’s priorities: it supports an investment in a frontier and conflict-affected sub-Saharan country. It is also aligned with the agency’s commitment to support South-South investments.

 
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