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DRC to launch hydroelectric plant in 2015

DRC to launch hydroelectric plant in 2015

May 31, 2013

Following the initialling of an energy co-operation treaty between the Democratic Republic of the Congo and the Republic of South Africa on 7 March 2013, the DRC has now re-launched the process for the selection of a developer and established the objective of laying the first foundation stone for the Grand Inga project in October 2015.

The first phase of construction of the world’s largest hydroelectric plant will start in October 2015 on the banks of the Congo River. With a power output of almost 40 000MW, the Grand Inda project is expected to bring electricity to half of the African continent.

At a meeting in Paris on 18 May 2013, organised by the government of the DRC, in the presence of a high level delegation from the Republic of South Africa, all of the stakeholders participated in a consultation process regarding the implementation of the first phase of the project, Inga 3, with a power output of almost 4 800KW.

The meeting, held under the auspices of Bruno Kapandji Kalala, Minister of Water Resources and Electricity of the Democratic Republic of the Congo, brought together the principal financial institutions, the candidates for the role of project developer, as well as technical, financial and legal advisors and experts.

The aim of the meeting was to permit discussion with the project’s key stakeholders of the main issues facing the project (the selection process, the perimeter, technical definition options, structuring, financing) with a view to determining how each partner might be involved. “All these exchanges served to clear various obstacles so that the development of Inga 3 can begin,” says Minister Kalala.

The co-operation agreement between the DRC and the RSA is critical and at the centre of the project.

The historic treaty between the Democratic Republic of the Congo and the Republic of South Africa was initialled on 7 March 2013 in Lubumbashi. This initialling, which confirmed co-operation on energy matters between the two states, is a major milestone for Grand Inga. By way of these cooperative arrangements, the Republic of South Africa expects to purchase a significant share of the electricity production of the new dam, thus confirming itself as a key partner.

As such, South Africa will take 2 500MW of the 4 800MW of future power production of Inga 3, thereby becoming the principal purchaser.

“We have affirmed our commitment to the project by already provisioning for this purchase in our budgetary plan,” says Garrith Bezuidenhoudt, chief of staff of the Ministry of Energy of the Republic of South Africa.

Inga 3 is expected to fill the power gap in the Democratic Republic of the Congo, to meet the growing needs of the country’s population and industries, particularly mining, and to meet demand in South Africa. To this first phase will be added subsequent steps that will permit countries in southern Africa, the north east of the continent and parts of West Africa, to benefit from the production of the site.

However, the issues surrounding the transportation of the energy and levels of connectivity have yet to be addressed.

“Inga is a factor for integration, at both a regional and international level,” says Minister Kalala.

As such, the project is in line with the Programme for Infrastructure Development in Africa (PIDA), a joint initiative of the African Union, the New Partnership for Africa’s Development (NEPAD), and the African Development Bank. It provides for the implementation of regional projects in the sectors of transport, energy, information technology and communication (ICT) and management of cross-border water resources (GRET). Grand Inga will thus provide more than half of the continent with renewable energy at a low price.

 

A public/private partnership (PPP) structure

Along with the two national partners, the rise of major financial actors has rendered possible the project that had been conceived at the beginning of the 1970s.
The Africa Development Bank has been involved in the project since 2009 and is financing the base studies and consultants. It has been joined by the World Bank, the French Development Agency, the European Investment Bank and the Development Bank of Southern Africa.

Three consortia are involved in the project as candidates in the competitive selection process for the role of developer: Sinohydro and Three Gorges Corporation from China – the operator of the Three Gorges Chinese dam, currently the world’s largest; Actividades de Construccion y Servicios (ACS), Eurofinsa and AEE from Spain; and the Daewoo-Posco-SNC Lavalin consortium from Korea and Canada.

A consortium comprising the American law firm Orrick, Herrington & Sutcliffe; the investment banks Lazard Freres and Tractebel Engineering; and the engineering consultancy of GDF Suez, is assisting the Government of the Democratic Republic of the Congo on the management and implementation of the project.

“The question of financing is a major issue in the selection process. It is the public/private partnership financing solutions which will be vital for the success of the project,” says Hela Cheikhrouhou, director for Energy Environment and Climate Change Department at the African Development Bank.

The first phase of Grand Inga, Inga 3 Low-Head, will provide 4 800MW. The environmental and social impact study shows that this phase has no impact on the population. They will not be affected by the flooded areas, which will remain relatively limited. The Inga 3 Low-Head will have no environmental impact on the flora and fauna of this area of sparse savannah.

“The original aim of the technical feasibility study was to structure the Grand Inga project in several plants,” says Edouard Dahome, director for Africa at EDF, which, alongside the American and French consultancies AECOM and Nodalis Conseil, conducted a feasibility study for the project. A myth dreamed of for 40 years, Grand Inga is becoming a reality, with an action plan spread over several plants which will be added in stages.

The Grand Inga site offers a combination of exceptional natural features: the tributary zone of the Bundi to the Congo River has a fall of 100 metres over approximately 15 kilometres, with a rate of 40 000 cubic metres per second. Inga 3 is divided into two phases. The first, starting in 2015, is called Low-Head, located downstream. It does not involve a dam on the river, but an intake from its tributary. These conditions will produce electricity at a very attractive cost. The second phase called Inga 3 High-Head, with a dam across the river and the raising of the water retention of the Low-Head will add 3 000MW of capacity. After that, five other plants will be installed on the same dam to provide a capacity of 40 000MW.

A hydroelectric installation already exists on the Congo River at this level with dams Inga 1 and 2, two plants in operation since 1972 and 1982 respectively, with a total capacity of nearly 1 800MW.

Highlights of the project include:

* Production of Inga 3 Low-Head – 4 800MW (the equivalent of the production of four nuclear plants)

* Of this, 2 500MW will be supplied to South Africa;

* Estimated construction cost of $8.5-billion (value 2011); and

* Estimated total financing needs, including inflation and financial costs of almost $12-billion.

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