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China scores big at Inga III

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Inga II which was completed in the 1980s and forms part of the Grand Inga Power scheme that has been a pipe dream until now. credit: Bloomberg

29 August 2020 – Against a backdrop of ruthless politics in the Democratic Republic of the Congo (DRC), Chinese companies have walked away with the biggest piece of the stop and go Inga III hydropower pie.   

Development of the Inga III hydropower scheme, one of the biggest projects on the cards in Africa, is gaining momentum in the DRC amid increased political tension.

The story of the 11 050MW project is mired in controversy, speculation, politics and rumours. Plans to develop this massive hydropower station has been on the table since 2013 when it was announced with great fanfare by, amongst others, the World Bank. Since then contractors and engineering companies from across the world have put in numerous bids for a piece of the pie. South African involvement was always part of the talks but a few years ago the country withdrew its support. However, it seems that there is a renewed appetite for Inga III in the office of President Cyril Ramaphosa. If the country is part of the agreement, South Africa, of course, will be one of the major beneficiaries of a project with the capacity to provide electricity to most of Southern Africa. South Africa’s energy supply is one of the biggest constraints in an economy struggling to find its feet after years of looting, corruption and now the impacts of Covid-19 lockdowns.

Recently, speculation was rife that a group of German and other European investors paid a visit to DRC President Félix Tshisekedi in Kinshasa to discuss Inga III. Tshisekedi has made Inga his flagship project amid his desperate fight to survive the tumultuous political landscape in the DRC. His predecessor, Joseph Kabila, could not get the project off the ground, and if Tshisekedi is able to pull it off during his tenure, he will score a few points against Kabila, who still has a significant presence in parliament. Kabila’s Common Front for the Congo (FCC) has a majority in Parliament with 342 of 500 seats and has control of 22 of 26 provinces, which renders Tshisekedi unable to implement policy decisions. As a result, Tshisekedi is clay in the hands of Kabila, who has moulded the political space to his own liking, despite Tshisekedi’s attempts to prove his critics wrong.

Meanwhile, a consortium consisting mostly of Chinese companies has now taken control of the USD-14-billion project on the Congo River. The consortium is made up of six Chinese companies led by the China Three Gorges Corporation, and AEE Power Holdings from Madrid, Spain. These companies were selected by the Agency for the Development and Promotion of the Grand Inga site (ADPI-RDC). Another Spanish company Actividades de Construcción y Servicios (ACS), withdrew from the project due to alleged disagreements over the distribution of shares.

Under the new agreement the six Chinese companies have a total 75% stake in the project, while the Spanish company AEE Power Holdings has a 25% share. The Inga III project will entail construction of two mega-dams and the erection of transmission lines expected to span between 2000km to 3000km across several international borders. The project will provide enough electricity to supply the whole of Kinshasa and to power the burgeoning DRC mining industry.

Once the project is complete, the DRC will be able to export most of the electricity generated at Inga to South Africa, Nigeria, and Angola. A deal was struck in 2013 to supply about 2.5GW of electricity to South Africa through cross-border transmission lines, but South Africa pulled out of the deal soon after. The question remains whether South Africa, desperate for additional energy supply, will look to the north and place its bets on regional cooperation. The project seems to be shifting gears, nevertheless, do not become too excited too soon. Inga II has been on the cards for so long, and it has been such a stop-start affair, that any news is good news. Let’s hope the DRC and its partners can pull it off this time.

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