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Congo, Democratic Republic of

Congo Equipment SPRL

$25 million
Services
Project Brief
Active

Project Facts

Project Facts

Project Facts

Democratic-Republic-of-Congo
Project ID
7147
Guarantee Holder
Bartrac Equipment
Investor Country
Mauritius
Environmental Category
B
Project Type
Non-SIP
Fiscal Year
2008

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.