RPT-IMF seeks fnc'l assurances on DR Congo debt relief

WASHINGTON, Nov 11 (Reuters) - The International Monetary Fund said on Wednesday it will seek financing assurances from the Paris Club of creditor nations to allow the Democratic Republic of Congo (DRC) to enter a global debt relief program.

DR Congo could not qualify for the Heavily Indebted Poor Countries initiative, a global program to write off the debts of impoverished countries, until it renegotiates a business deal with Chinese companies.

he IMF argued the China deal would push the country much deeper into debt at a time it was trying to rebuild from years of civil conflict.

The Congolese government signed an amended deal with the Chinese companies in October, which uses Congo's mineral reserves as a state guarantee for infrastructure projects.

The size of the Chinese deal was cut to $6 billion from an original $9 billion, and Congolese government guarantees connected with commercial mining aspects of the agreement were removed.

Ames said the revised deal would still significantly push up the country's debt, but would not have a major impact on debt sustainability over the long term.

'Nevertheless, in the absence of debt relief, the country's debt indicators would continue to indicate a high level of debt distress,' Ames said after discussions with the authorities in Kinshasa.

'On this basis, IMF staff expect to request financing assurances from Paris Club creditors regarding the rescheduling of the DRC's official debt,' he said, adding that soon after those assurances are given Congo could enter the HIPC program.

The World Bank has estimated that writing off Congo's estimated $7 billion in foreign debt would free up about $400 million a year in debt-service payments. Keywords: IMF CONGO/

(lesley.wroughton@thomsonreuters.com; +1-202-898-8317; Reuters Messaging: lesley.wroughton.reuters.com@reuters.net)