Nov. 13 (Bloomberg) -- The Paris Club of creditor nations may cancel between $5 billion and $7 billion of debt owed by the Democratic Republic of Congo at a meeting next week, Eurasia Group said.

The meeting starts on Nov. 18, analyst Philippe de Pontet wrote in an e-mailed note to clients today.

“Bilateral donors now look poised to sign off on a big debt cancellation deal,” he said.

After signing the accord, Congo will face a six-month probation period before the debt relief and a three-year facility with the International Monetary Fund are formalized. If it meets macroeconomic performance benchmarks during that period, multilateral development banks may also cancel their debt on similar terms to the Paris Club, de Pontet said. That would bring total debt relief to about $9 billion.

The cancellation may improve the investment climate, he added, though questions still remain about a review of the country’s mining contracts.

The government has already canceled First Quantum Minerals Ltd.’s half-billion dollar Kolwezi copper and cobalt project, though the company is expected to file for international arbitration. Freeport McMoRan Copper & Gold Inc.’s Tenke Fungurume $1.8 billion copper and cobalt project is also being renegotiated.

Freeport’s contract is “unlikely to go the way of First Quantum’s,” de Pontet wrote.

Last Updated: November 13, 2009 11:55 EST