By Aaron Ross
KINSHASA (Reuters) – Democratic Republic of Congo is in talks with Russian state-owned bank VTB <VTBR.MM> over potential investments worth as much as $1 billion, Congolese officials said, though VTB said there had been no discussions about bilateral lending.
Africa’s top copper producer has been hit hard by low commodity prices in recent years. It has only enough foreign currency reserves to cover about three weeks of imports and its franc currency <CDF=> has lost half its value in the past year.
The government is discussing possible assistance with the International Monetary Fund but Western donors are reluctant to aid the government of President Joseph Kabila, who refused to step down when his constitutional mandate expired last December.
Prime Minister Bruno Tshibala’s office said in a statement late on Monday that VTB representatives, including Managing Director and Head of African Origination Raymond O’Leary met with Tshibala on Monday to discuss a possible $1 billion investment fund to finance “strategic projects”.
The statement cited Albert Yuma, chairman of Congo’s state mining company and president of its chamber of commerce – who organized the meeting with Tshibala – as saying it would be “up to the government to decide how the funds are used”.
In a statement, however, VTB said its meetings in Congo were related to advising Congo about “successful future capital raising transactions” and “not with bilateral lending”.
Congo has tried to cultivate closer diplomatic ties to Russia amid growing strains in its relationship with the European Union and United States over its failure to organize elections on time and alleged human rights abuses.
In March, Congo’s foreign minister Leonard She Okitundu met with his Russian counterpart Sergei Lavrov in Moscow, where he offered Lavrov “a box of rare minerals” as a birthday gift, according to the Congolese ministry’s Twitter feed.
VTB, Russia’s second-largest bank, is one of several Russian financial institutions the United States sanctioned in 2014 over Moscow’s support for separatists in eastern Ukraine.
It was also at the center, along with Switzerland’s Credit Suisse, of $2 billion of loans taken out in secret by the Mozambique government, which has since defaulted on repayment.
VTB has denied any wrongdoing relating to the transactions, which IMF Managing Director Christine Lagarde described as “clearly concealing corruption” on the part of the Mozambique government.
(Editing by Ralph Boulton)