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Energy in Africa – Great potential

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Since last June, the river Congo levels have considerably decreased to an historical low since 1905, as a result of a severe drought. Only 5 of the 14 turbines of the Inga I and Inga II dams were operational in August, and the capital, Kinshasa was suffering from even more power cuts than average, causing considerable difficulties for the supply of potable water to Kinshasa, which at the same time was affected by a cholera pandemic. The situation became so critical that President Joseph Kabila, fearing perhaps the replication of the scenario of riots from angry consumers seen earlier in Senegal, coinciding with the beginning of the campaign for the November elections, sacked all the management of the Société nationale d’électricité (SNEL).

In all regards, this situation is a paradox. It reflects the gap stressed during the Africa Energy Forum of June 2011 in Paris by Noël Vika di Panzu – advisor to the DRC’s Minister of Energy – between the hydroelectric potential of the country (100,000 MW or 60% of the continent’s total, of which 44,000 MW at Inga) and the installed capacity (2 to 3%). Accordingly, such potential would allow not only to meet the country’s needs but to feed much of the continent too. Yet, massive investments are required to rehabilitate the Inga I and Inga II dams and repair and expand the distribution network in Kinshasa and even more funds (about $ 7 billion dollars) are needed for the next baby of the Inga saga: the Inga III 4,000 MW project. A minimum of US $ 22 billion would also be required for the Great Inga (39,000 MW) with the associated transmission lines that will interconnect the main sources of energy of the continent, including the large Ethiopian dams, the Aswan dam in Egypt, the coal-fired power stations of South Africa and large consumptions areas in Kenya and Nigeria.
The project is being criticized by NGOs who fear that this export-orientated project may not benefit the Congolese population. They fear a replication of the 1.700 km Inga-Katanga high power line scandal. The line crosses indeed vast areas of the country, which are left in the dark, before supplying mining industries in Katanga and the international market.
doa2Challenges are huge, points out Vika di Panzu. Only 9% of the 65 million Congolese have access to electricity, which is well below Africa’s average of 30%. The government projects to increase access to 19% in 2015, to 35% in 2020 and to 60% in 2025, which means an annual investment of US $ 1.3 billion to be compared with the $ 700 million pledged between 2003 and 2010 from the institutional banks. In addition, only half of the existing installed capacity of 2,500 MW is currently operational owing to obsolete equipments and lack of maintenance. The DRC has also a development plan for the 215 hydroelectric sites, but unfortunately, there are no funding studies on those projects. Besides, SNEL must absolutely improve the quality of its services, admits Vika di Panzu.
Accordingly, loans from traditional financial institutions such as the African Development Bank (AfDB), the World Bank and the European Investment Bank (EIB) will not be sufficient to meet these challenges. Moreover, funding to large dams is quite unpopular among NGOs and the European Parliament is quite reluctant as a draft report approved by its development committee in May 2011 shows. The document says that according to the World Commission on Dams “large dams have failed to produce as much electricity, provide as much water, or control as much flood damage as foreseen, they have had huge social and environmental impacts”, including “significant loss of species and ecosystems”. Moreover, according to the Commission, “the economic profitability of large dam projects remains elusive” whereas “small hydropower dams are more sustainable and economically viable”.
In this context, reform is inevitable to attract private investments and offer them a legally secure framework, pursues Vika di Panzu. The DRC’s sector is now liberalised. Since 2006, two Independent Power Producers were given concessions in both Kasais for a few megawatts. At the moment, SNEL still manages 95% of all the infrastructures, while the rest is managed by self-producers such as mining companies and the regulation is old. But a new legislation should be approved before the end of the year by the parliament. The Ministry of Energy will supervise the sector, while an independent regulator will arbitrate between producers and consumers and establish “cost reflective” tariffs. A new national electrification agency will be created to promote the expansion of the grid and access in the rural areas. The new framework should allow private companies to own and operate independent power production infrastructures and includes the possibility of transferring ownership to the public sector.
doa3According to Vika di Panzu, some progress has taken place towards the expansion of the site of Inga. A selection of power developers for Inga III is taking place at the moment. Six companies from China, South Korea, Spain, Spain, Canada and Austria have already been shortlisted. The Congolese government expects that, the Inga III project company will be selected by the end of the year. In addition, an African Development Bank-financed study on the “energy highways” from Inga and on the Inga site development is being carried out since March 2011, Electricité de France and the US company RSW It includes the prefeasibility study of Great Inga and of all the transmission lines. By September 2012, it should come up with a step-by-step roadmap for the development of the site. The plan involves the construction of a deepwater harbour, which will be needed both to evacuate the production of a US 2.5 billion aluminium smelter the Australian company BHP Billiton plans to build near the site to benefit from cheap power and before that to bring the equipments for the construction of the Inga III dam or of the 6,000 MW Great-Inga phase I project, depending on the conclusions of the study. Last June, at its annual meeting in Lisbon, African Development Bank spokespersons were suggesting that for technical and regional demand reasons, the option to abandon Inga III and instead to the immediate construction of the larger Great Inga-phase 1 project; could indeed be considered.

François Misser

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