October 30, 2009 / 11:55 AM / 9 years ago

India grants Congo $263 mln in infrastructure loans

KINSHASA (Reuters) - India has offered Democratic Republic of Congo $263 million in loans to build hydroelectric plants and repair battered infrastructure in the war-ravaged central African nation, Congo’s foreign minister said on Friday.

The two countries agreed the final terms of the loan package this week during a four-day visit by Foreign Minister Alexis Thambwe Mwamba to the south Asian economic powerhouse.

“The Indian government has made available $168 million for the Katende dam project in Kasai Orientale (province), $45 million for the Kakobola dam, and $50 million to rehabilitate the rail system in (the capital) Kinshasa,” he said.

Congo is increasingly looking to forge new partnerships to help finance ambitious plans to rebuild and expand infrastructure, most of which was destroyed during decades of kleptocratic dictatorship and a devastating 1998-2003 war.

Officials in Kinshasa announced last month that they had secured $25 million in loans from India to improve water and sanitation facilities and build a new IT training centre.

The announcement of the new Indian loan package follows a $6 billion infrastructure for minerals deal signed with China.

The Chinese deal is a cornerstone of President Joseph Kabila’s post-war economic policy to help rebuild mineral-rich but cash-strapped Congo.

However, the International Monetary Fund (IMF) and traditional partners had feared the contract, which uses mineral reserves as a guarantee for infrastructure projects, could plunge Congo deeper into debt. And the IMF had delayed forgiveness of most of the $10 billion Congo owes pending a revision of the deal.

Last month, Congo and China agreed to amend the contract, reducing the total value from an original plan of $9 billion, and Paris Club lenders are due to meet soon to discuss Congo’s request for debt cancellation.

Thambwe Mwamba told Reuters by telephone from India that Congo did not expect resistance from western lenders over the new credit line.

“These are loans that we need and that were accepted by the World Bank and the IMF,” he said.

Reporting by Joe Bavier; Editing by Richard Valdmanis/Victoria Main

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