The European Investment Bank (EIB) is holding off on decisions to finance the $760-million Ruzizi III hydropower plant in Central Africa, due to fighting between Rwandan-backed rebels and the Democratic Republic of Congo, a spokesperson said.

Europe is ramping up pressure on the adversaries following January's blitzkrieg by Congolese rebels that saw them overrun the strategic cities of Goma and Bukavu, attacks condemned by African leaders and Western countries.

The captured cities are, respectively, close to Rwanda and Burundi, which are involved in the three-country project. The Ruzizi river forms part of both countries' borders with the DRC as it flows from Lake Kivu to Lake Tanganyika.

The planned 206-megawatt Ruzizi III was being appraised ahead of financial closure expected later this year, project officials said, when Rwanda-backed M23 rebels launched their offensive.

"With the M23 gaining territory in South Kivu, the Ruzizi III project site is within the conflict area," a spokesperson for the EIB, the lead arranger, said in response to questions.

"We are taking a 'wait and see' approach as to how to proceed with the project ... We are also closely coordinating with our co-financiers".

Germany's state-owned development bank KfW, the French Development Agency (AFD), the African Development Bank and the World Bank are among the investors.

A KfW spokesperson said the bank adhered to Germany's policies and referred to a March 4 federal ministry statement saying new financial commitments were suspended amid a review of cooperation with the Rwandan government.

"The timeline for financial close will depend on the evolving situation," an AFD spokesperson said.

The World Bank said it was "actively engaging" all three countries, as well as regional body Energie des Grands Lacs to try to move towards financial closure with alacrity.

The proposed plant, in planning for more than a decade, would be the first public-private partnership project to generate renewable energy from shared resources in Africa. It would supply electricity to some 30-million people once completed.

Private sector partner TotalEnergies, via its SN Power unit, said it does not comment on funding of ongoing projects, while Nairobi-headquartered Industrial Promotion Services did not respond.

There are already two smaller hydropower dams on the river. A fourth phase is also being contemplated.

Aiming to operate by 2030, Ruzizi III would double Burundi's generation capacity and increase Rwanda's by a third, officials estimated previously.