Occasionally, the RBL borrowing entity is a joint-venture between the SOE of the borrowing country and a commercial company from the lender side or a special purpose vehicle (SPV) that has been formed. In 2008, a consortium of Chinese companies led by Sinohydro and China Railway Engineering Corporation (CREC) formed the joint-venture company Sino Congolaise des Mines (Sicomines) with DRC’s state-owned mining company La Générale des Carrières et des Mines (Gécamines). The Chinese companies owned 83% of the copper/cobalt venture. This newly formed joint venture company, Sicomines, then borrowed from the Eximbank [#9]. This loan also has an explicit financial guarantee from the government to 10 11 repay the loan in case the designated revenues were not sufficient to fully repay the loan. As the modified loan agreement states : Article 10.3. « The Democratic Republic of Congo has guaranteed repayment of the debt, in line with the current Convention on Collaboration, through the granting of mining concessions or concessions for other natural resources to SINOHYDRO if repayment of the loan due to JV Minière falls short of the repayment needed to cover its investment in the Infrastructure Projects. » Article 13.3.4. « In the case that JV Minière has not been reimbursed for the investments and interests from the Infrastructure Projects within 25 years of the start of the loan, the Government of the Congo is committed to paying the outstanding balance by any means necessary. » Loans taken by Republic of Congo’s Société Nationale des Pétroles du Congo (SNPC) from commodity traders were kept off the Ministry of Finance’s books. The IMF and other observers became aware of these loans in June 2017 as soon as SNPC experienced difficulties servicing them.12 [#19] [#21] [#22] Publicly available data on sovereign guarantees that support SOE debt is sparse (see section 5/b). It was therefore difficult to ascertain how commonplace such arrangements were.

# c. RBLs by type of lender

From our review of 30 RBLs, we identified 13 different creditors that extended RBLs to African countries during the period studied. These can be grouped based on their economic functions or based on their classification as either an official bilateral creditor versus private/commercial creditor.

Based on functional grouping, the primary sources of RBLs are state policy banks/development banks. The two policy banks of China, China Development Bank (CDB) and China Export-Import Bank (Eximbank) are the top RBL lenders by volume. These two policy banks were initially set up by the State Council of China to carry out economic policies. 13 Within our data set, Chinese policy banks are the source of 76% ($36bn) of the RBLs to Africa, with Eximbank and CDB contributing $17bn and $18bn each.

> 10 The original 2008 loan agreement guaranteed both the infrastructure loan and a loan for the mine. <u>http://congomines.org/system/attachments/assets/000/000/276/original/B5bis-Sicomines-Convention-Incl-Anx-2008-ConsortiumEntreprises-Chinoises-RDC.pdf?1430928308</u>

> 11 A 2009 amendment narrows the guarantee to the infrastructure loan only. http://www.congomines.org/system/attachments/assets/000/000/502/original/ Sicomines-2009-Avenant3ConsortiumEntreprisesChinoises-RDC.pdf?1430928992 12 IMF, Country Report No. 19/244 on Congo: Staff Report (2019),

~ <u>www.imf.org/ /media/Files/Publications/CR/2019/1COGEA2019001.pdf</u> 13 CDB website: http://www.cdb.com.cn/English/gykh_512/khjj/ Eximbank website: <u>http://english.eximbank.gov.cn/Profile/AboutTB/Introduction/. The Agricultural Development Bank of China is the third Chinese</u> policy bank, but has no known record of providing RBLs.

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