On March 17, 2016, MIGA issued guarantees of $74.7 million covering equity investments, shareholder loans, and retained earnings by Bartrac Equipment of Mauritius for the expansion of Congo Equipment’s (CE) business in the Democratic Republic of the Congo (DRC). The coverage is for a period of up to 10 years against the risks of transfer restriction, expropriation, and war and civil disturbance. MIGA used its Conflict-Affected and Fragile Economies Facility to support this project.
This coverage represents an increase of MIGA’s original support to the project.
The project involves the establishment and ongoing operations of a dealership for Caterpillar earthmoving equipment as well as power generating equipment in the Katanga region. The dealership’s main activities include the sales, rental, and service of machines and generations sets—as well as parts sales. CE has expanded its operations to mining client sites in Fungurume, Sakania, and Kolwezi and also plans to relocate its headquarters to a larger site in Lubumbashi in line with the growth of its business.
The project is expected to make a strong developmental contribution, as its products and support services are highly important in the production of copper—the primary revenue earner in the DRC’s Katanga region.In 2013, mining and oil exports accounted for 97% of the total value of goods exported from DRC. Even in the face of lower international prices, the mining sector is expected to remain the main driver of growth in the economy as a whole. Increased availability of earthmoving equipment and maintenance services will enhance the productivity of the sector.
Also, the earth moving equipment will help build up the road network in a country where critical infrastructure remains a key constraint to growth and where travel from province to province is still often difficult.
MIGA’s support for this project is aligned with the agency’s priorities of supporting investments into countries eligible for financing from the International Development Association and countries affected by conflict.