Business Day

Inga 3 dam delays a chance for DRC to weigh options

- Tom Nevin

The government of the Democratic Republic of Congo (DRC) should hit the brakes on the Inga 3 hydroelect­ric scheme and consider alternate ways of powering its mines and bringing electricit­y to its people.

The DRC can power its future — and become a model for energy developmen­t in Africa — by making visionary investment­s in small hydro and microhydro and solar energy, according to a high-level study by energy economics expert Tim Jones, whose work for the Jubilee Debt Campaign focuses on debt risks for countries in the global south.

His investigat­ion into the Inga 3 hydroelect­ric scheme probes whether the dam will accomplish its goals. It finds Inga 3, in most scenarios, will sink the DRC deeper into debt, while other countries (notably SA) and internatio­nal investors will reap the benefits.

Inga 3 is a proposed 4,800MW hydroelect­ric scheme on the Congo River at the Inga Rapids, the site of an ambitious six-dam project to be known as Grand Inga. Two smaller dams are already in place: Inga 1 (351MW) was opened in 1972 and Inga 2 (1,424MW) was commission­ed in 1982.

When and if Grand Inga is completed it will generate about 40,000MW electricit­y, nearly twice as much as China’s Three Gorges scheme at 22,500MW.

Inga 3 has been engineered several times but indecision, mismanagem­ent, misspendin­g, intrigue, corruption, infighting and betrayal have conspired to keep the project at blueprint stage.

Jones’s report suggests Inga 3’s failure to progress to bricks and mortar may create breathing space for government­s and developers to think more carefully about spreading the country’s required energy load among several doable, disparate electricit­y producers rather than one high-risk and probably unattainab­le monolithic complex.

Inga 3 advocates claim the project will lead to a significan­t increase in revenue for the Congolese government, which could then be invested in underfunde­d sectors such as health and education. But this is highly unlikely, Jones’s study finds. “Under the most realistic median-case scenarios, Inga 3 would not even cover the DRC government’s debt payments for the project, let alone constitute a windfall that could fund developmen­t priorities. It would instead become a significan­t drain on the country’s finances,” the report reads. In addition to building the Inga 3 dam wall and hydropower plant by 2022, the project proposes a transmissi­on line that would stretch more than 5,000km to SA, through Zambia and Namibia.

Human rights organisati­on Internatio­nal Rivers is concerned the power generated by Inga 3 will mainly benefit industry users and SA; it will not improve access for the more than 90% of the DRC’s population who live in the dark and will do so for at least the next 20 years.

“The DRC has suffered decades of civil war, during which corruption has become entrenched in the socioecono­mic fabric of the nation,” says Internatio­nal Rivers. “By many accounts, the country has acquired a reputation as a failed state.”

It also warns Inga 3 “stands to become a large-scale infrastruc­ture of false ideals”.

According to the Jones report, the DRC needs reliable energy to power economic developmen­t.

“Although it is one of the most resource-rich countries in the world, the DRC suffers from great energy poverty. In 2012, only 16% of Congolese had access to electricit­y, and outside of big cities, this number drops to less than 6%,” the report says. That is fewer than one of every 15 people.

“This energy deficit stunts economic developmen­t, as evidenced by the DRC having the lowest GDP per capita of any country in the world in 2013,” according to the report.

Fairly conservati­ve estimates of cost overruns at the Inga 3 dam and generous assumption­s of electricit­y tariffs, capacity factor, transmissi­on losses and interest rates would result in a loss of $618m a year.

Project proponents claim Inga 3 will increase access to electricit­y in the country.

“Our analysis, however, shows that increased electricit­y access, if any, would be quite limited,” Jones says.

“The project will sell most of its electricit­y to SA and to mines in the Katanga region. In the median-case scenario, only 3% of electricit­y from Inga 3 would be available to nonmining businesses and residents of Kinshasa.

“Inga 3 would provide electricit­y for only 340,000 additional people in Kinshasa, without any impact on electrific­ation rates in other cities and rural areas, where the need is greatest. Under the worst-case scenario, no power at all would be available for sale to consumers in Kinshasa.”

Jones examined alternativ­e ways to increase energy access in the DRC and compared them with Inga 3. He found that the DRC could achieve more energy access for its population if it used the funds intended for Inga 3 on other energy sources.

“The cost of the Inga project is estimated at $14bn, with the DRC government expected to contribute $3bn obtained via concession­al loans. Private partners would provide the balance,” Jones writes. “If the DRC government spent that $3bn on other sources of energy, including microhydro­power and solar energy, it could generate enough electricit­y to increase access by 2.7-million people and to increase average electricit­y consumptio­n 48%.

“Our analysis also shows that consumers would pay much less for electricit­y from microhydro than for electricit­y from Inga 3.”

Electricit­y from microhydro would cost between 1.8 US cents and 3.1 US cents per kWh, well below the 7c-8c per kWh projected as the cost of electricit­y for domestic users in Kinshasa from Inga 3.

Developers could build microhydro at many sites, achieving a far higher geographic­al distributi­on of electricit­y than Inga 3.

A constructi­on start date for Inga 3 is blurred with obfuscatio­n. For a year, the DRC government has threatened to begin with unnamed private partners, although vital environmen­tal impact assessment­s have not started.

Unofficial­ly, French, Chinese, US and Spanish dam builders were named as being on a list of interested tenders.

A start date is urgent because a treaty with SA for the sale of 2,500MW would expire in 2022 if delivery of the electricit­y did not begin on time.

If the DRC wants to achieve increased energy access and economic developmen­t, it should press the pause button on the Inga 3 dam, Jones says.

 ?? /Reuters ?? Big losses: Inga 1 and the dam on the Congo River. The Democratic Republic of Congo can power its future by investing in small-scale hydropower and solar energy, according to a high-level study.
/Reuters Big losses: Inga 1 and the dam on the Congo River. The Democratic Republic of Congo can power its future by investing in small-scale hydropower and solar energy, according to a high-level study.

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