Further Delays with Inga III Hydroelectric Project in DRC

Government's commitment to attracting foreign investments, however, could turn the tide in the project's favour, finds Frost & Sullivan

Jan 21, 2016, 07:30 ET from Frost & Sullivan

CAPE TOWN, South Africa, Jan. 21, 2016 /PRNewswire/ -- The demand for electrification in Africa is unquestionable and seemingly insurmountable given the current state of energy affairs. The first phase of the Inga III dam project, Basse Haute (BC), is planned to commence in 2017 and has the capacity to generate 4,800 megawatts (MW) of green energy. The hydroelectric potential of the Inga site is estimated at 40% of the continent's total capacity. Should the project gain traction, a multitude of opportunities will present themselves in operations, maintenance and indirect markets like consulting and skills development.

New analysis from Frost & Sullivan, The Hydroelectric Inga III Project of the DRC, finds that the government of the DRC will collaborate with several African states, either as off-takers of power or as host countries for transmission lines. With South Africa's cabinet having approved the ratification of the treaty, this will allow South Africa to consume 2,500 MW of the power from Inga III, while other off-takers will include the capital city of Kinshasa and the mining region.

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"Inga has already been delayed as the selection of a consortium to build the dam is in an unplanned second round of bidding," said Frost & Sullivan Energy & Power Systems Research Analyst Tilden Hellyer. "While the cost of Inga III and the associated transmission lines have been budgeted at US$14 billion, the amount has been underestimated several times in the past and it is unclear what the true cost might be." Environmental concerns surround The Bundi Valley. The area will flood when the Congo River is channelled, submerging arable land. However, several experts in geology, geotechnology, and sedimentology have been appointed to conduct studies aimed at minimising the environmental impact of the project.

Under the political and economic conditions, it will take transparent collaborations to improve the chances of Inga coming into fruition. Gradually, several development and financial institutions are beginning to contribute finances and expertise to the project. The government of the DRC is aiming to make business in the country more attractive and increase foreign direct investment through various incentive packages. The government recognises that public-private partnerships (PPP) are the best way to mobilise private participation. PPP contracts with the government of the DRC are currently open for the dam wall, intake and canal.

"If the project gathers momentum, it will take 6 years to complete common infrastructure, both direct and indirect markets stand to gain," observed Hellyer. "Transmission and distribution networks under the leadership of South Africa will require technical expertise in DRC, Zambia, Zimbabwe, Botswana and South Africa. By connecting the South African Power Pool through transmission makes it easier to collaborate, strengthen relationships and build revenues. A private consortium under a concession contract with the DRC will take shape to repair old and construct new transmission lines within the DRC. A similar concession contract will emerge for the power station at the Inga site."

The success of the Inga III Basse Haute will open up further opportunities to explore DRC's hydroelectric power capacity and its potential to truly become Africa's energy highway.

The Hydroelectric Inga III Project of the DRC is a Market Insight that provides analysis into the opportunities that a new hydroelectric dam in the DRC will provide over the next decade. The study delves deep into the current state of the DRC power industry, offering drivers and restraints of the project, key participants in the project as well as legislative environment and investment opportunities.

The Hydroelectric Inga III Project of the DRC

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