Mobilizing Local Financial Institutions to Fund Large-Scale Mining Projects

Context

Financing large-scale mining projects is often complex and capital-intensive, with many initiatives in Africa facing difficulties securing funds from international lenders due to perceived risks. Upstream mining projects, in particular, require substantial upfront investment before revenues are generated.

In many countries, local financial institutions have historically played a limited role in such deals, citing constraints in available capital, transaction structuring capacity, and risk appetite. However, when local banks can lead financing arrangements, they are well placed to align transactions with national development priorities, embed local content requirements, and ensure compliance with international environmental, social, and governance (ESG) standards.

One example of this approach is the syndicated loan arranged by Rawbank in the Democratic Republic of Congo (DRC) to support the expansion of the Kamoa-Kakula copper project. The deal included provisions such as repatriation of 60% of revenues to the DRC.[i] The case illustrates how local banks can drive development impact in high-stakes mining projects.

Challenge

The mining industry finds it difficult to arrange financing for projects, particularly those in the upstream stage, due to the inherent risks involved[ii] [iii]:

• High capital requirements: Projects of a large scale, such as the Kamoa-Kakula copper project require significant upfront capital for expansion and local financial institutions in Southern African countries usually do not have the required capital to enable this
• Complex regulations: Being a highly regulated industry, arranging financing requires managing legal and operational complexity, which deters many financiers, particularly those from outside the region
• Risk perception: Factors such as political instability, violent conflicts, infrastructural challenges, regulatory uncertainties and price volatility of critical minerals, all increase the inherent risks in such projects
• Lack of precedent: There have been very few examples of syndicated loans led by local banks and this required innovative structuring and collaboration between diverse stakeholders

Approach

Rawbank, the largest commercial bank in DRC, emerged as a key player in financing the critical mineral sector, especially through its role in arranging a $400million syndicated loan to support expansion of the Kamoa-Kakula copper project:

• Leadership in the syndicated loan: Rawbank pioneered the structuring of the syndicated loan, bringing other banks such as the FirstBank DRC and Absa Bank on board to mobilize blended capital[iv]
• ESG considerations: Rawbank ensured that the financing aligned with international standards on ESG such as those by the International Finance Corporation (IFC), International Council on Mining and Metals (ICMM) and Global Industry Standard on Tailings Management (GISTM) ensuring sustainable mining practices and compliance with DRC’s mining laws
• Renewable source of energy: By arranging 150 MW of clean hydroelectric power from Mwadingusha and Inga II, the project helped in reducing its carbon emissions
• Localization of content: Rawbank took the initiative in bringing local suppliers such as Pacific Logistics into the project, which also ensured compliance with Article 108 of DRC’s mining code
• Innovative financing tools: Use of platforms such as Rawbank online and SIOP for automating transactions and providing tailored solutions for working capital, equipment finance and trade finance[v]

Conditions

Several factors supported the success of this financing arrangement:

• Supportive regulatory framework: DRC’s legislations, particularly the 2018 Mining code, enabled a structured legal environment, which mandated local financial inclusion
• Strategic partnerships: By including Absa Bank and FirstBank DRC, Rawbank was able to mobilize sufficient capital for the project
• Institutional capacity: Rawbank’s established market presence and project finance expertise enhanced credibility with international investors.

Observed Impact

The transaction is having tangible impacts on the DRC’s mining and energy sectors:

• Copper production: The funds raised by Rawbank for the expansion of the Kamoa-Kakula copper project would enable it to become the 3rd largest copper mine in the world, with an annual production capacity of 600,000 tons[vi] (they produced 437,000 tons in 2024[vii]), which would be ~20% of the total 3.3 million tons of copper produced in the DRC[viii]
• Renewable energy upgrade: The project installed a capacity of 178 MW of hydroelectric power to the national grid, helping with the energy transition[ix]
• Flagship case: This deal helps set a precedent for other financial institutions in Africa, as other local banks can also lead complex syndicated structures, ensuring greater availability of funds to the mining sector

What’s Next for the Southern African Region

This example offers lessons for countries seeking to expand mining investment through domestic financial sector participation:

• Empower local banks: Strengthen capacity, access to capital, and risk management tools so they can co-lead or lead large-scale mining financing
• Integrate ESG in financing: Ensure compliance with international standards is embedded in financing arrangements to attract global partners and meet sustainability goals
• Leverage blended finance: Combine domestic and international capital to de-risk projects, mobilize larger funding packages, and attract new investment into the mining value chain

[i] https://globaltaxnews.ey.com/news/2018-5549-democratic-republic-of-congo-reforms-mining-code

[ii] https://african.business/2025/05/politics/african-led-diplomacy-struggles-to-resolve-drc-war

[iii] https://african.business/2025/02/resources/miners-struggle-to-raise-capital-for-african-critical-minerals-projects

[iv] https://www.africanlawbusiness.com/news/20215-kamoa-copper-secures-third-phase-expansion-funding/

[v] https://www.kapitalafrik.com/2024/02/05/rawbank-announces-a-200-million-injection-into-the-congolese-mining-sector-via-an-international-fund-raising-operation/

[vi] https://rawbank.com/la-banque/wp-content/uploads/sites/2/2024/06/Rawbank_Annual-Report-2023.pdf

[vii] https://bankable.africa/en/mining/0901-673-dr-congo-biggest-copper-mine-produced-437-061-t-in-2024

[viii] https://energycapitalpower.com/new-exploration-expansion-projects-drive-africas-copper-market-growth/

[ix] https://rawbank.com/la-banque/wp-content/uploads/sites/2/2024/06/Rawbank_Annual-Report-2023.pdf

OTHER SOURCES

Rawbank presentation, Workshop 2, WEF SMET