DRC – USA: $1 billion for carbon capture?

By Jeune Afrique
Posted on Thursday, 5 May 2022 11:35

A muddy road is seen near town of Mobwalu in Ituri province, eastern Democratic Republic of Congo, April 6, 2018. Picture taken April 6, 2018. REUTERS/Goran Tomasevic

A $1bn carbon credit scheme by US investors linked to the forests of the Democratic Republic of Congo is the latest sign of growing ties between the administrations of DRC President Félix Tshisekedi and President Joe Biden.

While a new partnership between Kinshasa and the Central African Forest Initiative is being worked out, another agreement is the subject of difficult negotiations between the Congolese environment ministry and the US company dClimate.

The DRC’s General Finance Inspectorate (IGF) recently drew up a damning report on the management of Congolese forest concessions. Nevertheless, the local timber sector continues to attract great interest from international partners as well as from private companies.

According to our research, in addition to the financing agreement concluded in November 2021 with the Central African Forest Initiative, a memorandum of understanding was recently the topic of discussions between the Congolese environment ministry and the American company dClimate.

Carbon credit registry

Negotiations began in January with a first visit to the DRC by a delegation from the US company. Prior contact had been established in December during a trip to Washington by Félix Tshisekedi’s “Mr USA”, Serge Tshibangu. Tshibangu was introduced to dClimate’s investors through the former US special envoy for the Great Lakes region, J. Peter Pham. Among those involved in the company are American billionaire Mark Cuban and Chainlink founder Sergey Nazarov.

Discussions continued in March with the arrival in Kinshasa of a large American delegation led by Brian Nelson, US Treasury Under Secretary for Terrorism and Financial Intelligence. dClimate founders Philip Heilberg and Si Jha presented their project to the Congolese authorities and in particular to Deputy Prime Minister and Minister for the Environment Ève Bazaiba. The goal is to develop a system for registering carbon credits in the DRC and to enable their monetisation.

500,000 hectares of forest

The agreement is meant to remain in force for ten years and is worth almost $1bn, divided into ten annual instalments. In order for it to be finalised, the Congolese authorities must define a geographical area from which the project can be developed. According to our research, this would be an area of at least 500,000 hectares of forest and peat bogs containing several dozen million tonnes of carbon dioxide.

If an agreement is reached, dClimate would open an office in Kinshasa and finance the mapping of the delimited area. For its part, the Congolese government would commit to preventing deforestation in the area and to maintaining policies and monitoring procedures that comply with US agency rules and anti-corruption laws.

Five months after negotiations began, however, talks appear to have stalled. A delegation from dClimate reportedly visited the DRC in April to finalise the project, but no agreement has yet been made. This delay is annoying the American partners, who have denounced the attitude of the environment ministry.

“They [dClimate] represent the very type of major investors that Kinshasa claims to want to attract. Their abandonment of the project – because of the shabby treatment they received from the minister and the ministry – will be a very negative signal to other American investors about the business climate in the DRC,” said J. Peter Pham.

Contacted by our journalist, Éve Bazaiba’s office was more optimistic, referring to a “procedural problem”, adding that “the project is still under discussion and will soon be presented to the government at the Council of Ministers.” Moreover, “according to the forestry code, any area larger than 300,000 hectares can only be allocated by the presidency.”

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