The Risks and Rewards of Resource-for-Infrastructure Deals: Lessons from the Congo’s Sicomines Agreement

The document examines Resource-for-Infrastructure (RFI) agreements, which allow resource-rich but credit-constrained developing countries to secure infrastructure funding by securitizing future mineral or oil revenues. Using the Sicomines deal in the Democratic Republic of Congo (DRC) as a case study, the author highlights the benefits of rapid investment and reduced embezzlement risks, while warning against high costs, poor quality, and a lack of transparency. The brief recommends increasing supply-side competition, implementing third-party quality controls, and adopting conservative risk calculations to improve the outcomes of such deals.

• Resource-for-Infrastructure (RFI) arrangements are primarily used by Chinese policy banks, such as Eximbank and China Development Bank, to provide infrastructure loans that are securitized against the net present value of future oil or mineral revenues.
• The 2007 Sicomines agreement between the DRC and the China Railway Engineering Corporation (CREC) was valued at over USD 9 billion, involving USD 6.565 billion for infrastructure and approximately USD 3 billion for mining investment.
• The Sicomines project faced significant setbacks, including a 35 percent downward adjustment of estimated copper reserves from 10.6 million tons to 6.8 million tons by 2013, and a reduction in peak output from 400,000 to 250,000 tons per year.
• RFI deals offer advantages such as rapid infrastructure investment and a reduced risk of government embezzlement because funds do not pass through the host government's coffers.
• RFI agreements are prone to higher costs due to a lack of competitive bidding and may suffer from poor quality because lenders have little incentive to enforce standards beyond ensuring loan disbursements.
• The 'omnibus character' of RFI deals, which weave together multiple financial and commercial agreements, makes them less transparent and more difficult for third parties to monitor than traditional contracts.

APA

Landry, D. G. (2018). The Risks and Rewards of Resource-for-Infrastructure Deals: Lessons from the Congo’s Sicomines Agreement. South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2018/01/CARI_PB22_LandrySicomines.pdf

Chicago

Landry, David G. The Risks and Rewards of Resource-for-Infrastructure Deals: Lessons from the Congo’s Sicomines Agreement. South African Institute of International Affairs, 2018. https://saiia.org.za/wp-content/uploads/2018/01/CARI_PB22_LandrySicomines.pdf.

Wikipedia

{{cite report |last1=Landry |first1=David G. |title=The Risks and Rewards of Resource-for-Infrastructure Deals: Lessons from the Congo’s Sicomines Agreement |publisher=South African Institute of International Affairs |date=2018 |url=https://saiia.org.za/wp-content/uploads/2018/01/CARI_PB22_LandrySicomines.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{landry2018risks, author = {Landry, David G.}, title = {{The Risks and Rewards of Resource-for-Infrastructure Deals: Lessons from the Congo’s Sicomines Agreement}}, institution = {South African Institute of International Affairs}, year = {2018}, url = {https://saiia.org.za/wp-content/uploads/2018/01/CARI_PB22_LandrySicomines.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }