The $80 billion (R800bn) Grand Inga Hydropower Project which promises to generate from the Congo River a massive 44 000 MW and features South Africa as a critical piece is taking shape.
The African Development Bank (AfDB) announced yesterday that its board has approved $68 million (R680m) in financing for the multinational Inga Site Development and Electricity Access Support Project (PASEL). The AfDB said the project (PASEL) will further the development of the Inga hydropower plant which has “a vast hydro-electric potential estimated at 44 000 MW – half of the continent’s installed electricity capacity.”
The AfDB said PASEL will finalize the preparation of the first phase of the Grand Inga Hydropower Project called the Inga 3 Project. Inga 3 will consist of developing a power-generating capacity of 4,800 MW on the Inga site and building power transmission lines that will supply electricity to the Democratic Republic of the Congo (DRC) and South Africa.
The AfDB announcement comes a few weeks after South African President Jacob Zuma came back from the DRC waving an agreement to take up about half of the electricity to be generated out of Inga. While it will materialize in the medium to long term, the project is critical to South Africa’s scramble to secure power supply as the country is currently struggling with a very tight national grid. New capacity being rolled out by South Africa’s power utility Eskom will come to plug a whole temporarily because more and more of the country’s old power stations are reaching their expiry dates.
The AfDB cited the DRC/South African agreement as a critical piece in that it guarantees the bankability of the Grand Inga Hydropower Project. The project has been described as the most ambitious infrastructure development project ever undertaken across the African continent.
The AfDB said with this approval, the support of the AfDB to the Inga project, since the inception of the mandate to lead the implementation of the NEPAD Infrastructure Action Plan, will amount to-US $90 million.
The AfDB noted that “Specifically, this project will facilitate the development of the local institutions and skills necessary (technical, legal and financial advisors will be provided) to attract private capital for the completion of Inga 3 which is a complex project. In addition, capacity-building efforts will enable local actors to make a wise choice for the project’s principal investor-developer under the public-private partnership. Improved access to electricity is also expected in the semi-urban areas of Kinshasa for more than 25,000 households.
“This is the right project for the DRC and the Bank – at the right time,” said Alex Rugamba, Director of the AfDB’s Energy, Environment and Climate Change Department. “It is timely because it facilitates the implementation of Inga 3 whose investment costs would otherwise be difficult to mobilize in the current context of the DRC.”
The AfDB’s financing will be used to cover the cost of technical assistance to ensure the completion of preparatory activities for the Inga 3 Project. It will also help address electricity scarcity in remote areas that are not directly covered by Inga but where the DRC intends to develop electrical systems around micro- or mini-hydropower plants. The Bank will put several advisers at the disposal of the Inga Site Development and Promotion Authority and conduct several studies on the Inga project that will generate real-time gains in the overall project schedule.
The AfDB said PASEL builds on previous AfDB support to the Inga Hydropower Project, which led to: the development of institutional and technical plans; a feasibility study, which defined the development pattern of the Grand Inga by successive phases; and the identification of an innovative approach to the project that will guarantee the full realization of Inga’s hydro-electricity potential and promote continental integration.
The Inga 3 Project will increase access to more reliable and cheaper energy in the DRC, contributing to an increase from the current 9% to over 40% by 2020. It is also expected to improve the business climate and productivity of the economies of beneficiary countries.
The AfDB said “Current demand for electricity in the region is huge and steady, guaranteeing a market for the energy to be produced from the hydropower plant.”
“Indeed, South Africa has already signed an agreement with the DRC to import about half of the electricity that will be produced, guaranteeing the bankability of project. Signed by the presidents of South Africa and DRC in October 2013, the treaty, which is the framework for the energy-purchase agreement, is awaiting ratification by their respective national parliaments,” said the AfDB statement.