DRC: the Government and the GEMCORP Group plan to set up a financing facility of USD 500 million for the benefit of oil companies

With a view to providing a lasting solution to the problem of the rise in the price of petroleum products, the Government, through the Ministry of the National Economy, plans to set up, with the GEMCORP Group, a financing facility to guarantee fuel supplies and reduce the cost of the oil subsidy.

It was Nicolas Kazadi, Congolese Minister of Finance, acting as Minister of the Economy, who announced it on Friday August 26, 2022, during the weekly meeting of the Council of Ministers.

According to Patrick Muyaya, Spokesperson for the Congolese Government, this facility, which amounts to 500 million US dollars, is divided into tranches and could be offered to the Government on quasi-concessional terms. It will allow local importers to have direct access to fuels
, thus eliminating the additional costs associated with intermediaries. This at a price compatible with the official level retained in the price structure. This would solve both the solvency problem of importers
local importers as well as the risk of shortage on the market.

This facility, which should contribute to reducing the budgetary cost of the subsidy, also has the advantage of increasing the transparency of the flow of fuel volumes to be subsidized.

Seeking the discharge of the Congolese Government, Minister Nicolas Kazadi recommended the establishment of an ad hoc Commission to continue discussions with GEMCORP, finalize the technical proposal and define the
operational mechanisms of the financing facility. This, with the involvement of other stakeholders in the process of regulation of the sector, in particular the Ministries of Hydrocarbons and that of Finance.

In addition, the Ministry of National Economy plans to strengthen synergy with other ongoing initiatives, in particular that of the Société Nationale des Hydrocarbures du Congo (SONAHYDROC)-United Bank for Africa (UBA) facility.