MIGA has issued a guarantee of $4.32 million to African Company for Oil Derivatives; Freiha Feed Company; Ralph Freiha; and Yousef Freiha and Sons, covering their equity investment in Congo Oil and Derivatives SARL in the Democratic Republic of Congo. The coverage is for a period up to 10 years against the risks of transfer restriction, expropriation, and war and civil disturbance.
The project involves the installation and operation of a vegetable oil refinery in the port town of Boma. The plant will produce refined palm oil, as well as refined soya bean oil . It will have a capacity of 150 tons of oil per day and will largely serve the local market, which is partially dependent on imports. There is also a possibility of exporting to neighboring countries, in particular to Angola, a post-conflict economy with limited industrial capacity.
The project is expected to have a positive impact on the country’s economy by creating jobs for the local population, generating significant annual tax revenues (after year four) for the government, and local procurement of goods and services, mostly related to transportation, fuel, and utilities, as well as lodging and boarding for expatriate personnel.
MIGA’s support for this investment is aligned with the World Bank Group’s country partnership strategy for DRC for 2008-2011, particularly with regard to laying the foundation for a medium-term poverty reduction effort.
MIGA’s participation in the project is aligned with its strategic priorities of supporting projects in the world’s poorest countries and in conflicted environments. It is also a South-South investment. The project was underwritten through MIGA’s Small Investment Program.