Abstract:
The Democratic Republic of Congo (DRC) has been attracting investors? attention since the colonial era. It started from the country?s early colonial history under King Leopold II of Belgium when the then colony nearly single-handedly satisfied global demand for rubber to manufacture tires for the growing automobile sector. It has substantial untapped gold, diamonds, uranium, cobalt and high-grade copper reserves. The DRC accounts for 55% of the global production of Colombo-tantalite (coltan), a vital component of mobile phones. Though, itsmining sector presents a high-risk high-return opportunity for investors, it also presents significant political and security risks underlined by a lack of robust infrastructure, especially power infrastructure. Given the lack of critical infrastructure to support its mining industry, the DRC signed a Memorandum of Understanding (MoU) in 2009with the Republic of South Africa (RSA) in order to build Africa?s largest hydropower project with an ability to supply electricity to both countries as well as a considerable number of other countries on the African continent. This was followed by the Grand Inga Hydropower Treaty of 29 October 2013. This treaty allowed them to finance the building of the huge Grand Inga Hydropower Project. This dam, when built, will also have the capacity to impact positively on their economies as well as that of the SADC region and the African continent. In the light of the budgetary constraints, the DRC Government has been exploring various options to fund this colossal project especially from private sources. Unfortunately, the nature of the DRC?s legal system and the kind of financing requirements are not too appealing to investors. Besides, the framework for managing legal risks in the funding of such critical infrastructure projects in the country is not well developed. In the face of significant political, security and legal risks associated with project financing in the DRC, this study argues that there is a need to identify, assess and mitigate these risks, especially those of a legal nature, to facilitate the funding of the Grand Inga project.
