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Viewing cable 07KINSHASA177, WORLD BANK REVEALS IMMEDIATE FUNDING PLANS

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Reference ID Created Released Classification Origin
07KINSHASA177 2007-02-14 14:52 2011-08-25 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Kinshasa
VZCZCXYZ0018
RR RUEHWEB

DE RUEHKI #0177/01 0451452
ZNR UUUUU ZZH
R 141452Z FEB 07
FM AMEMBASSY KINSHASA
TO RUEHC/SECSTATE WASHDC 5600
INFO RUCNSAD/SOUTHERN AFRICAN DEVELOPMENT COMMUNITY
RUEHXR/RWANDA COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
UNCLAS KINSHASA 000177 
 
SIPDIS 
 
SIPDIS 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: EFIN ECON PGOV EAID CG
SUBJECT: WORLD BANK REVEALS IMMEDIATE FUNDING PLANS 
 
REF: 05 KINSHASA 1193 
 
1. (U) Summary. The World Bank plans to spend USD 140-180 million on 
immediate reconstruction projects in the DRC. The DRC World Bank 
(WB) office aims to fund rapid, visible impact projects in order to 
help the GDRC begin meeting the population's expectations quickly. 
The WB Board will review the proposals this spring. Its programming 
may include balance of payments support; funds to complete internal 
debt repayments; trash removal, road rehabilitation and an 
anti-malaria effort in Kinshasa; and aid to street children. End 
summary. 
 
2.  (SBU) The World Bank (WB) shared its immediate funding 
priorities during a January 31 meeting between Xavier de Victor, the 
WB's DRC Deputy Country Director, and USAID's DRC Director and 
Program Officer.  De Victor said the "Emergency Project" program is 
in the design phase and that the WB wants to present a proposal to 
the Board in March or April.  Its intent is to have activities on 
the ground in Kinshasa as soon as possible to provide a tangible and 
visible "peace dividend" to the population. 
 
3. (SBU) De Victor said a WB design team has spent several weeks in 
Kinshasa working with a multi-functional team of 20 staff from 
various DRC ministries to develop the proposals. He said the design 
is "well-advanced," but the Office of the WB President has not yet 
cleared on it.  When asked if the President's clearance was normal 
procedure for a project such as this, Xavier responded such 
procedure may be due to high-level USG interest in this project in 
Washington, but he did not give details. 
 
Project Components 
------------------ 
 
4. (SBU) The WB plans to provide USD 30-50 million in balance of 
payments support to the GDRC, but it has not yet decided whether to 
support parastatals, or the private sector.  De Victor is leaning 
toward the latter. (Comment: Post agrees the private sector is 
currently in a better position to absorb such support. End comment.) 
 Should the support go through the private sector, the Congolese 
Central Bank would receive the funds and sell the foreign exchange 
to Congolese private sector importers, generating  USD 30-50 million 
in counterpart funds.  The proceeds would then be used to pay the 
operating costs of schools around the country. 
 
5. (SBU) Payment of the remaining internal debt is another priority 
in order to help stimulate the private sector (reftel). The GDRC and 
the Congolese Chamber of Commerce agreed in 2005 on a discount rate 
of 77 percent on existing debt, with 50 percent of the balance to be 
repaid in 2005 and 25 percent paid each in 2006 and 2007.  The GDRC 
only made the 2005 payments.  (Comment: This delay seemed to result 
at least in part from a disagreement between the Ministry of Finance 
and OGEDEP, the DRC's public debt management agency, over control of 
the program. End comment.)  The estimated cost for the remaining 
2006 and 2007 repayments is USD 50 million. 
 
6. (SBU) The WB is considering offering three contracts for about 
USD 10 million each for urban road repair in Kinshasa province. They 
believe the contracts will be bundled so that they would attract 
Chinese bidders. Groundbreaking could not take place before December 
2007.  De Victor asked for USG assistance in advertising these 
tenders once the project is approved. 
 
7. (U) The WB also has a rather preliminary plan to support garbage 
removal in Kinshasa province's urban areas, with a USD 10-20 million 
budget.  The idea seems to be to support a labor-intensive project, 
but as yet there is no disposal solution.  (Comment: Kinshasa has no 
available landfills, and creating one would involve extensive 
environmental due diligence and training. Consideration should be 
given to a recycling program as an alternative. End comment.) 
 
8. (U) Two other proposed projects are indoor DDT spraying and 
support for street children.  The DDT project's goal is to combat 
malaria, at a cost of USD 15 million.  The proposal is to spray the 
inside of all Kinshasa homes with DDT three times before the end of 
2007, although large logistical and management challenges to this 
effort exist.  The WB is also interested in budgeting USD five to 
six million to provide care for some of the thousands of DRC's 
street children. (Note: Several viable models exist for the latter 
program, although opinions vary on the overall policy approach. End 
note.) 
 
COMMENT 
------- 
 
9. (SBU) The WB will obviously have many issues to work through to 
get this multi-faceted program off the ground. Some have to do with 
public expenditure management, some are environmental and some are 
sectoral policy related (e.g., debates on whether street children 
should receive alternative care or be reunited with families).  Many 
of the projects appear designed to support the newly-elected 
government, as they coincide with the five reconstruction/ 
development priorities President Kabila has announced. However, the 
program selection process may be more complicated than necessary; 
easing the design and approval process would still permit 
programming that provides a substantial peace dividend.  End 
Comment.