News (82)
Last week, the Prime Minister of the Democratic Republic of Congo (DRC), Judith Suminwa, attended the Rebranding Africa Forum in Brussels, Belgium. On the forum’s opening day, Suminwa encouraged investors to come to her country and explore available business opportunities. Representing President Félix Tshisekedi, she highlighted the DRC's rich natural resources, including cobalt, gold, and oil, despite ongoing security challenges.
"The DRC offers unique development opportunities for those who choose to invest there now," said Thierry Hot, the event's promoter.
"It is essential to exchange ideas and formulate concrete proposals that lead to a convergence of skills," the PM added. She also emphasized the need for collaboration among public, private, and civil society sectors to boost the economy. Suminwa also pointed out the important roles of youth and women in economic development.
In her closing remarks, the Congolese official stressed that the DRC's growth relies on everyone working together and called for "collective action to realize existing opportunities."
The DRC keeps ramping up efforts to improve its business environment. Its public investment plan for the next three years includes spending 10,646 billion Congolese francs ($3.7 billion) on infrastructure projects in transport, energy, and food production.
Georges Auréole Bamba in Brussels
Ivanhoe Mines has cut its zinc production targets for 2024 at the Kipushi mine in the Democratic Republic of Congo (DRC). In a press release on October 7, 2024, the Canadian company said it halved the estimate from 100,000-140,000 tonnes to 50,000-70,000 tonnes of zinc concentrates.
"The transition to a stable annual production rate of over 250,000 tonnes of zinc concentrate from the Kipushi concentrator has been slower than expected due to three main factors: first, the ore extracted has a high iron content, which negatively affected concentrator recoveries. Second, the density separation circuit had more fine material than anticipated, limiting throughput. Lastly, the increase in power needs from 5 MW during construction to 18 MW for operations revealed issues in the local power grid," the company explained.
Ivanhoe said it is working on a program to fix these issues but did not provide details on when it will be completed.
Despite these challenges, Kipushi produced 17,817 tonnes of zinc in the third quarter of 2024, and exports began toward the end of that quarter. However, reaching the expected annual production of over 250,000 tonnes of zinc concentrate from this mine is still a long way off.
Kipushi is owned by Ivanhoe Mines (62%) and the Congolese government (38%).
ET
On October 14, 2024, Anna Bjerde, the World Bank's Managing Director of Operations, finished a four-day visit to the Democratic Republic of Congo (DRC). During her trip, she reviewed the World Bank's projects in the country. "The World Bank is implementing 22 projects in the DRC, with an investment of around $7.3 billion. We have the opportunity to accelerate these investments to achieve rapid results," she said after meeting with top officials, including President Félix Antoine Tshisekedi and Prime Minister Judith Suminwa.
Bjerde did not share details about the progress of these projects or any challenges faced during their implementation. She also did not mention the necessary solutions to speed things up.
The World Bank's work in the DRC focuses on important areas like economic management, governance, private sector development, human capital (health, education, social protection), and sustainable development (infrastructure, agriculture, food security, electricity, and water).
Recently, the World Bank announced a billion-dollar investment in the Inga 3 hydroelectric dam project (11,000 MW), which is a key priority for the DRC. It also plans to invest $510 million in a digital transformation project starting in February 2025.
"We are very impressed by the success of the free basic education policy in the DRC," Bjerde said. A few weeks ago, Kinshasa announced it would eliminate all school fees in public primary schools. This change is expected to help 3.5 million children about 26.7% of elementary school-age kids attend school.
Olivier de Souza
Initially scheduled for June 2024, the Forests and Savannas Restoration Investment Program (PIFORES) was launched on October 14 in Kinshasa. The launching ceremony was attended by Anna Bjerde, the World Bank's Managing Director of Operations.
The PIFORES aims to improve land-use planning, forest management, and the livelihoods of local communities in seven provinces: Kinshasa, Kongo Central, Kwilu, Kasaï, Kasaï Central, Kasaï Oriental, and Lomami. The World Bank loaned the DRC $300 million for the project.
According to official documents reviewed by Bankable, the loan breaks down into several components: $17 million for improving land-use planning and governance for natural resource management, $215 million for developing agroforestry and forestry value chains; here, the goal is to foster sustainable landscape management and enhance local livelihoods. Another $25 million will support the development of a sustainable value chain for energy and clean cooking. Finally, $13 million will be invested in innovative approaches for measurement, reporting, verification, and results-based climate financing. $30 million is set aside for project implementation, monitoring, and evaluation.
To implement the components related to agroforestry and forestry value chains as well as clean energy initiatives—accounting for most of the project budget ($240 million)—micro-grants will be awarded to projects focused on forestry, agroforestry, and improved cookstove production. These grants will supplement the project owner's funding, with specific percentages and maximum amounts detailed in the program manual. In a previous program, the owner's contribution ranged from 40% to 60%, with co-financing between $100,000 and $1 million. Beneficiaries may include SMEs, smallholders, private operators, and farming households selected through bidding.
Submitted forestry and agroforestry projects must cover between 50 and 1,000 hectares. Applicants must present a business plan showing an acceptable return on investment, taking into account the subsidy. Here, projects must also meet socio-environmental standards and demonstrate a positive social impact on neighboring communities through employment or investment benefits. For small private landowners, plantation areas should range from about 10 to 50 hectares; farming households should have between 1 and 50 hectares. All project owners must have a land title.
The World Bank and the DRC government are behind the PIFORES project. They said the program should benefit around 4.5 million people, including 50,000 from indigenous communities. Regarding potential impacts on poverty reduction, the initiators referred to a similar program (also in agroforestry) that boosted beneficiaries’ income by 18% —about $448 per year—along with significant non-monetary benefits. Additionally, the PIFORES aims to bring over 4 million hectares of land under sustainable use practices, helping to reduce deforestation in targeted areas by about 10% while sequestering or preventing emissions of 30 to 35 million tons of CO2.
Pierre Mukoko
On October 8, 2024, Albert Zeufack, the World Bank's representative in the Democratic Republic of Congo, announced plans for a multi-phase, billion-dollar program to develop Grand Inga. "This program, which includes the iconic Inga III dam project, aims to transform the DRC's economy, ensure Africa's energy security, and contribute significantly to the global energy transition," Zeufack said on his LinkedIn account.
The Inga III hydroelectric dam project has faced many delays and reassessments over the years. While the World Bank is playing a key role in its current phase of development, Inga III is not yet officially part of the institution's interventions.
The funding will not only help cover implementation costs but also support the redesign and execution of the project. The goal is to ensure steady progress through various development phases while overcoming technical and financial challenges that have hindered the project so far.
This year, two projects, totaling $745 million, were launched. The first, valued at $145 million, was completed on June 30, 2024. According to the World Bank, this project expanded electricity access to 2.2 million people, mainly in Kinshasa.
The second project is ongoing. It involves a $600 million contribution to an integrated water and electricity initiative, which has a total cost of $900 million. This complex project may also prepare for the support needed to restart Inga III.
This initiative includes activities aimed at strengthening provincial authorities' technical capacities to implement effective water and electricity distribution policies. It also provides credit lines to the private sector for power generation while allocating around $223.25 million for the public sector.
Inga III is becoming a strategic priority for the DRC. The project's importance has evolved since its inception, requiring a new approach to adapt to current conditions. One major challenge remains financial modeling, which is essential for ensuring the project's viability.
The Congolese government is considering building a power plant with an installed capacity of 4.8 gigawatts. The project is expected to pump around $15 billion. The sum could be raised through mining contracts like the Sicomines deal. However, careful management is crucial, and the World Bank could play a key role in this effort.
George Auréole Bamba
In the Democratic Republic of Congo (DRC), the African Development Bank (AfDB) will support a staple farming project with $260.4 million. The Congolese Council of Ministers approved the financing on October 11, 2024.
The project aims to boost the production of rice, corn, and cassava, the main food products in the DRC. It will include building storage facilities and providing financial support to producers and other stakeholders in these areas.
The funds will be allocated across several regions: the Western Axis, which includes Kongo Central, Maï-Ndombe, and Kwango; the Central Axis, covering Kasaï Oriental and Lomami; and the Eastern Axis, primarily in Sud-Kivu.
Environmental studies have been completed at the intervention sites, and certificates of conformity have been obtained for both production zones and storage infrastructure.
The AfDB plans to implement the project between 2024 and 2029. Funding will mainly come from the African Development Fund ($250.4 million) and the African Transition Facility ($10 million). The Congolese government will also contribute $51.2 million, bringing total funding to $311.6 million—well above the $163 million allocated for agricultural investment from 2025 to 2028.
This project aims to address food security challenges in the targeted regions. For instance, in the cassava sector, a staple for about 70% of the population, current availability is only 47 kilograms per person per year, while needs are estimated at 144 kilograms.
According to the World Bank, in 2022, 56% of the DRC's workforce worked in agriculture. However, the sector contributed only $51.7 billion to the economy between 2013 and 2023, despite the country having vast arable lands. The World Bank’s investments in the DRC’s agricultural sector currently stand at around $322 million.
Georges Auréole Bamba
Ivanhoe Mines scaled down its 2024 production targets at the Kamoa-Kakula mine in the Democratic Republic of Congo (DRC). In a press release dated October 7, the Canadian company revised its expectations from 440,000-490,000 to 425,000-450,000 tonnes of copper concentrate.
Last month, Ivanhoe was very optimistic about the mine’s outputs: "Thanks to ongoing improvements in throughput and optimized copper recovery after launching the Stage 3 concentrator fine mills, Kamoa-Kakula expects to maintain its record production run and achieve its 2024 targets".
With the commissioning of the third treatment plant last August, Kamoa-Kakula achieved a record production of 116,313 tonnes of copper concentrate in Q3 2024. So far this year, the mine has produced 303,328 tonnes, according to Ivanhoe.
While the revised estimate integrates the commissioning of the Phase 3 concentrator, it reflects "production losses due to intermittent electricity supply from the grid, especially before installing additional on-site generation capacity and ongoing agreements for electricity imports." It also includes "known and unknown risks and uncertainties that may cause actual results to differ significantly." The country’s power issues caused production in H1 2024 to fall 5% year-on-year to 187,015 tonnes.
Last year, Kamoa-Kakula produced 393,551 tonnes of copper concentrate, up 18% year-on-year. Sales in 2023 also went up, exceeding $2.7 billion. This year, they should be higher due to rising copper prices. In Q1 2024, the average copper price reached $9,215.84 per tonne compared to $8,726.90 during the same period in 2023.
Kamoa-Kakula is owned by Ivanhoe Mines (39.6%), China’s Zijin Mining Group (39.6%), Crystal River Global Limited (0.8%), and the Congolese state through Gécamines (20%). During a Council of Ministers meeting on October 4, 2024, Minister Jean-Lucien Bussa expressed a desire for closer involvement of the Congolese State in selecting buyers for the copper produced by this mine, which is not only the largest in the DRC but also ranks as the third largest copper mine in the world.
Pierre Mukoko
On October 9, 2024, Vodacash SA, the mobile financial services branch of Vodacom RDC, signed a partnership with the International Finance Corporation (IFC), the private sector financing arm of the World Bank. This strategic agreement will help Vodacom expand its user base for M-Pesa, its mobile micro-finance and money transfer service launched in 2012.
"IFC is very proud to sign this partnership with M-Pesa in the DRC to facilitate access to financial services for many more people. Through this partnership, IFC will expand the M-Pesa service, increase the number of agents using it, and provide more people in remote areas with access to this financial service," said Mary Porter Peschka, IFC Director for East and Central Africa.
With this partnership, Vodacom aims to strengthen its leading position in the mobile financial services market. As of March 31, 2024, Vodacom had 12.07 million subscribers, giving it a market share of 52.05%. Airtel follows with a 27.81% share, Orange has 20%, and Africell holds just 0.15%.
To expand the M-Pesa service, the partnership aims to "strengthen interactions with the mobile financial services industry" and promote "regulation that facilitates the expansion of electronic money" while reducing "over-the-counter (OTC) transactions," which are conducted directly between two parties without intermediaries.
Most people still use cash in the DRC. In 2022, the International Monetary Fund (IMF) estimated that only 26% of the working population had a bank account. According to the country’s telecom watchdog, the ARPTC, there were 24.19 million active mobile money subscribers in the DRC as of March 31, 2024, representing a penetration rate of 24.36% for a population of nearly 100 million.
One major barrier to using e-money and banking services is identification. To open an account, individuals need a voter’s card, driver’s license, or passport which many Congolese do not have. Vodacom states that this partnership with the IFC aims to "overcome challenges facing the mobile financial sector, particularly identification issues," while promoting "best regulatory practices."
While specific changes to current regulations are not detailed, the collaboration will focus on five main areas: providing loans as part of best practices; strengthening local teams to improve key personnel skills; integrating agents and merchants for better processes; developing a go-to-market strategy for registering M-Pesa customers; and enhancing risk management by creating efficient work processes and training Vodacash staff.
Pierre Mukoko
The Democratic Republic of Congo (DRC) is set to gain significantly from the discovery of large gold reserves by Barrick Gold Corporation, a Canadian firm. Mark Bristow, the firm's President and CEO, announced that these reserves are located in the Kibali region, about 150 kilometers from Arua near the Ugandan border.
This discovery presents major opportunities for mining subcontractors, local councils, and the government to earn more through taxes and infrastructure contracts with Barrick as it aims to increase gold production in the DRC.
To date, Barrick Gold claims payments of $2.87 billion to local contractors and suppliers, $1.66 billion in royalties, taxes, and levies, and $216 million in infrastructure and community support.
While specific details about the reserves are still under wraps, exploiting them could position the DRC among the world's top gold producers and exporters. Bristow stated that the new reserves will greatly enhance output at Kibali, which is already the largest gold mine in the world. “The newly defined ARK target, located 4 kilometers from the processing plant, has the potential to provide a multi-million ounce high-grade deposit,” he said.
In 2023, the DRC was the seventeenth-largest gold producer globally, with a slight increase in output from 2022. Production is expected to rise by 0.88% between 2023 and 2027, according to Global Data.
Barrick Gold, which owns the Kibali mine, is a joint venture between Randgold (45%), AngloGold Ashanti (45%), and Sokimo (10%).
Emmanuel Tumanjong
At the Hamburg Sustainable Development Conference (HSC) on October 7-8, 2024, Judith Suminwa Tuluka, the Prime Minister of the Democratic Republic of Congo (DRC), called for fair compensation for carbon credits for countries with large forest areas.
"The DRC, like the Amazon, is a solution country with its forest basin that acts as a green lung for the world. We must be fairly rewarded for our contribution to fighting global warming. It's time to have an honest discussion about carbon pricing. We have formed a strategic alliance with Brazil and Indonesia to prioritize our tropical forests. Our voices need to be heard, and negotiations must lead to real results," she said during the panel discussion titled "Summit of the Future - What Next?"
The Prime Minister also highlighted the carbon offsetting services provided by forest ecosystems. Congolese forests absorb more carbon than those in the Amazon and Southeast Asia combined. According to World Bank data, these forests are among the few that sequester more CO2 than they emit yearly, acting as a net carbon sink and removing 822 million tons of CO2 equivalent annually.
Given this context, Suminwa stressed the need for a fair global price for carbon credits so that countries can fully benefit from their forest resources.
Her call comes just weeks before the 29th United Nations Climate Change Conference (COP29), scheduled for November 11-22, 2024, in Baku, Azerbaijan. As in previous summits, climate financing for African countries will be a key topic of discussion.
According to the French Development Agency (AFD), 90% of the $22.5 billion in climate action funding recorded in Africa comes from external sources. A better valuation of carbon credits could help forest-rich countries raise additional funds to adapt to climate change impacts.
It's worth noting that Maï-Ndombe province in the DRC was one of the first regions to pilot the REDD+ program, which aims to reduce emissions from deforestation and forest degradation while promoting sustainable forest management.
Espoir Olodo
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In March 2024, Sino-Congolaise des Mines (Sicomines), a joint venture between the state-owned Gecamines and a group of Chinese companies, signed a new contract with the Democratic Republic of Congo (DRC). Under this agreement, Sicomines will donate $324 million a year—about 32% of its profits—to fund infrastructure projects. This information was shared by the International Monetary Fund (IMF) in its report following the sixth review of its program with the DRC, published in July 2024.
Under the contract, around $5.5 billion should be spent on infrastructure development from 2024 to 2040, when Sicomines’ concession ends. Adding previous loans, total financing for the concession would thus exceed $7 billion. This amount far exceeds the $3.5 billion needed for the three-year public investment plan for 2025-2027. Additionally, it covers more than a third of the funding required for the first phase of the Inga 3 project (4.8 gigawatts), as outlined by President Félix Tshisekedi in his speech on December 13, 2019. This financing could significantly reduce the debt needed to complete this ambitious energy project.
Given that copper prices averaged $9,215.84 per ton in the first half of 2024, funding from the Sicomines contract for infrastructure could increase. The IMF notes that the annual donation of $324 million is based on an international copper price of $8,000 per ton. "The contract states that the subsidy will be adjusted: it will drop to zero if prices fall to $5,200 per ton and will increase by 30% if prices reach $12,000 per ton," the Fund said.
However, managing this financial boost is crucial to maximizing benefits. "Transparency and accountability mechanisms regarding the use of funds generated by the new contract need to be strengthened," says the IMF. To address this, they recommend that authorities include Sicomines' income and expenses in the budget and regularly publish financial reports on funded projects. A meeting was held at the Ministry of Finance last July to discuss how to implement these IMF recommendations.
In 2023, the DRC's mining sector generated $5.4 billion in revenue for the state from royalties, taxes, and other payments made by mining companies. This sector remains a key driver of the Congolese economy, and the revised contract with Sicomines could further enhance this dynamic. Along with funding for infrastructure projects, the revised contract includes royalties of 1.2% on Sicomines' annual sales and gives Gecamines control over marketing 32% of annual production. "This reduces opportunities for transferring profits from the DRC to Chinese buyers through transfer pricing," indicates the IMF.
Pierre Mukoko
In the Democratic Republic of Congo (DRC), the government plans to build a seed analysis laboratory and create a national seed service between 2025 and 2026. The authorities will spend about $18 million (51.6 billion Congolese francs) on the project. This information is part of the public investment program for 2025-2027 included in the finance bill for fiscal year 2025.
The document does not provide further details on the project, but it is expected to help regulate the seed industry and be welcomed by those in agriculture.
According to the National Report on Climate and Development (CCDR) released by the World Bank in November 2023, the certified seed system in the DRC is still in its early stages, with only 5% of farming households using improved, climate-resistant seeds. The report suggests that increasing public-private support for producing climate-resilient seeds could help the agricultural sector adapt better to changes in temperature and rainfall.
A 2020 report from the African Centre for Biodiversity (ACB) found that less than 4% of seeds used in the DRC come from the official seed system, whether purchased from agricultural traders or donated through development programs. Farmers primarily rely on seeds from their previous harvests or buy them from local markets and communities.
Espoir Olodo
Two months away from Air Congo’s launch in the Democratic Republic of Congo (DRC), executives from Ethiopian Airlines met with Jean-Lucien Bussa, the Congolese Minister of Portfolio. During the meeting, held on October 3, discussed the project. They believe its success will depend on strong cooperation between both parties.
Air Congo is a mixed-economy company with a capital of $40 million, where the Congolese state holds a 51% stake and Ethiopian Airlines holds 49%. This partnership allows Ethiopian Airlines to strengthen its lead over competitors in the DRC, a country rich in natural resources essential for energy transition, with economic growth projected at 6.5% by 2025.
Unlike local private airlines like CAA, Ethiopian Airlines can leverage its extensive international network. The airline currently operates four direct flights to the DRC: two to Kinshasa, one to Lubumbashi, and one to Goma. Additionally, it partners with Asky, which runs two daily flights to Kinshasa from Lomé and South Africa.
With Air Congo's launch, Ethiopian Airlines could also leverage its connections with international organizations like the United Nations. The airline's experience would help meet some air transport needs for these groups, which are often served by private airlines or chartered planes.
First Aircraft Delivery Expected in November
Air Congo’s arrival is a key step toward better air service, especially as road infrastructure struggles to connect major cities effectively. "This project aims to strengthen national air connectivity, stimulate the economy, and marks a major strategic turning point after the suspension of Congo Airways," said the Ministry of Portfolio.
Congo Airways has been inactive since July 2024 due to a lack of operational aircraft. The airline has 90 days from September to renew its international IOSA certification, which is currently suspended. This situation has reduced air transport options in the country. Before the COVID-19 pandemic exacerbated its financial issues, Congo Airways was carrying nearly 400,000 passengers annually, according to 2018 data.
Structurally, the Congolese State will appoint the deputy managing director and six directors for Air Congo, while Ethiopian Airlines will appoint the managing director and three other directors. For now, however, no detail has filtered on the investment strategy.
Ethiopian Airlines has previously provided aircraft to other partners but it’s uncertain if this will happen with Air Congo. After last week’s meeting with Ethiopian Airlines executives, the Ministry of Portfolio announced that the first aircraft would be delivered in November but did not provide further details.
Georges Auréole Bamba
Julien Paluku, the Congolese Minister of Foreign Trade (Democratic Republic of Congo) visited Tesla's factories in San Francisco on October 2, 2024. After the visits, the official said that the American company "gives hope" to the DRC, which seeks to produce electric batteries. "Cobalt, lithium, manganese, nickel, coltan... are housed in our land. The others, who don't have it, have done it in 20 years. Let's chase immediacy and plan," he tweeted.
Tesla serves as an inspiration. After raising about $7.5 million in 2004, the company's valuation reached nearly $785 billion by October 4, 2024, with earnings of $14.9 billion in 2023. This is more than the combined value of the 18 largest companies in the DRC's portfolio, estimated at $10.9 billion in 2022. Julien Paluku noted that this impressive growth shows that to achieve great things, you need to take action: "To get started, you have to get started."
The DRC took many steps to advance its project for the local transformation of resources essential for the energy transition. Among others, the country set up a Council to oversee its goals related to batteries and electric vehicles, the Conseil Congolais des Batteries. It also created the DRC Battery Corporation, a joint venture among several mineral producers responsible for supplying raw materials for pilot battery production plants. Additionally, a framework agreement was signed with Zambia to jointly produce electric batteries, enhancing regional cooperation in this key industry.
On the research side, a significant step was taken with the launch of the African Center of Excellence for Batteries (CAEB) at the University of Lubumbashi on April 22, 2022. This center focuses on promoting innovation and technological development in battery technology.
To achieve these ambitions, the DRC must overcome major infrastructure challenges, particularly in electricity supply and connectivity (roads and telecommunications).
Paluku's visit to Tesla is part of broader efforts by Congolese authorities in the United States to showcase the DRC's potential and attract American investors. These initiatives aim to secure international partnerships to support development in strategic sectors like electric battery production and effective use of natural resources essential for energy transition.
Julien Paluku previously led the Industry portfolio and helped develop a $58.4 billion industry plan.
Georges Auréole Bamba