The Congo Dam Project That Could Transform The Prospects Of A Continent

1
1269

If all the inga dams are built they would become the world’s biggest power source, able to switch the lights on across a continent.

It is rare that a single civil engineering project could have the potential to transform the economic prospects of an entire continent but that is the promise offered by the world’s largest hydroelectric project – the Inga dams across the Congo River. Inga is “undoubtedly the most transformative project for Africa in the 21st century,” said Augustin Matata Ponyo, Prime Minister of the Democratic Republic of the Congo (DRC), and it’s easy to see why. If the full project is rolled out it could have a potential generating capacity of up to 50GW making it the biggest power-producing facility in the world. It would, at a stroke, produce enough electricity to power the whole of southern Africa with enough left over to transmit north to Nigeria, Egypt and even southern Europe.

“The decision of eskom to buy power has made all the difference because south africa is a credible market.”

Dr Agathe Maupin, the south african institute of international affairs

The biggest winner would be the DRC, the planned location of the dam. It is presently the second poorest country in the world in terms of per capita GDP and a population of 70 million people subsist on an average annual income of US$655. In one way that’s easy to understand as few countries have suffered such a history of conflict and misrule but in another, it’s almost incomprehensible because something like US$24 trillion worth of resources sits beneath its soil, much of which is in the form of high grade ore. The problem is that in order to extract, refine and transport the ore, the DRC needs electricity; a large mill requires about 100MW of power to grind rock, for example. Officials say the DRC’s copper sector, which is the mainstay of the economy, could increase exports from 1 million to 1.5 million tonnes a year if it weren’t crippled by electricity shortages. The Glencore corporation, which runs two fabulously productive mines in the Katanga copper belt in the south of the country, suffered a month of lost production in 2013 owing to power cuts. It would like to expand production but at present the electricity supply acts as choke chain on growth. So, it’s easy to imagine a future in which Inga acts as the catalyst for economic growth, first of all for the DRC. If the third Inga dam is built, most of the electricity will initially go to South Africa but that will still be a valuable export.

The next biggest winner would be the mines but in the words of Dr Oladiran Bello, Head of the Governance of Africa’s Resources Programme at the South African Institute of International Affairs, they are, “the goose that lays the golden egg”. The final winner would be the DRC’s capital and largest city, Kinshasa; the cheapest and most important place to electrify.

The rural population would lose out in the early stages but as the state acquired more money and more administrative capacity it would begin to build transport and water systems which would stimulate activity among the entrepreneurs of Kinshasa. In turn, that would bring more formal employment and more revenue to the state which could then invest in more infrastructure including, eventually, the rest of the Inga dams. At that point the DRC would become Africa’s continental power station, supplying Nigeria, Egypt and, eventually, Europe. The result would be a democratic, middle-income country with motorways and a national grid. It won’t happen overnight of course but it may happen sooner than anyone thinks.

Africa rising

The importance of Inga extends well beyond the DRC. In both East and West Africa, stable countries have been able to grow at 7% for the past 10 years. This has been achieved on the back of oil and gas discoveries and high demand for minerals, particularly from China. In terms of electricity provision, sub-Saharan Africa is grossly deficient. Its 49 countries have a total population of 826 million and an installed generating capacity of 68GW, roughly equivalent to the electricity output of Iran. But that figure obscures the real situation because around 65% of capacity is accounted for by the dominant economy of South Africa. Dr Agathe Maupin, a researcher at the South African Institute of International Affairs (SAIIA) who specialises in water and energy resource management, says much of the electricity generated in surrounding countries is exported to South Africa, including most of that produced by the Cahora Bassa system in Mozambique. As a result, many people still cook on wood-burning stoves and light their homes with oil lamps in about 80% of sub-Saharan Africa and their small amount of electricity comes from expensive diesel generators.

The importance of Inga extends well beyond the DRC. In both East and West Africa, stable countries have been able to grow at 7% for the past 10 years. This has been achieved on the back of oil and gas discoveries and high demand for minerals, particularly from China. In terms of electricity provision, sub-Saharan Africa is grossly deficient. Its 49 countries have a total population of 826 million and an installed generating capacity of 68GW, roughly equivalent to the electricity output of Iran. But that figure obscures the real situation because around 65% of capacity is accounted for by the dominant economy of South Africa. Dr Agathe Maupin, a researcher at the South African Institute of International Affairs (SAIIA) who specialises in water and energy resource management, says much of the electricity generated in surrounding countries is exported to South Africa, including most of that produced by the Cahora Bassa system in Mozambique. As a result, many people still cook on wood-burning stoves and light their homes with oil lamps in about 80% of sub-Saharan Africa and their small amount of electricity comes from expensive diesel generators.

In pure economic terms this is a serious matter as the industries Africa is relying on to accumulate the capital for investment are mostly those with large electricity demands. The biggest company listed on an African stock exchange is Dangote Group, a conglomerate based in Nigeria with interests in a variety of sectors. Its founder, Aliko Dangote, disclosed one of the secrets of his success during an interview with TIME magazine. He said: “The number one thing that kills businesses in Africa is power, or the lack of power. We wanted to have our businesses completely independent, with our own grid. So we built it. It took US$1.2 billion.”

Why the time is right

“People have a tendency to talk about the Grand Inga project but that doesn’t exist anymore,” said Dr Maupin of SAIIA. “The idea at the beginning was to have four dams – the two that have already been built plus Inga 3 and then Inga 4, which was going to be huge. That idea was dropped a couple of years ago and the plan was changed to divide the project into more phases to create seven dams with eight big power stations generating 40- 50 gigawatts.”

The advantage of this
approach is that it aligns
civil engineering with
financial engineering. The
cost of generating the full
50GW is put at somewhere
between US$50 billion
and US$80 billion, clearly
beyond the capacity of
any conventional sources
of development finance. So
the Government of the DRC
and its national electricity
company, SNEL, is currently
focused on building Inga 3
at a cost of about US$12-
14 billion. They will also
rehabilitate the first two
Inga dams since a history
of neglect means that five
out of 14 turbines no longer
turn. The result should be
an installed hydro capacity of 8GW, with 4.8GW coming from Inga 3. The present capacity of the DRC is 2.5GW and less than half of this finds its way to plug sockets owing to the poor condition of the distribution infrastructure. So it’s clear that even this first phase has the potential to transform the country’s situation.

One factor that should help bring the project to fruition is the greater willingness from overseas to invest in Africa. Dr Michael Jennings, chair of the Centre of African Studies at the School of Oriental and African Studies, University of London said: “There’s certainly a greater flow of investment into sub-Saharan Africa because markets are regaining confidence in certain areas. There are huge unknowns and so it’s a matter of learning by experience. Having invested, do you get the return you were expecting and is that return stable? There are greater sources of finance available now and African governments are taking advantage of that but it becomes problematic if governments are doing things based upon investors’ priorities rather than what’s good for the country.”

Another positive factor is that there is a guaranteed market for the electricity that would be produced, one of the most important requirements in a capital-intensive energy- generation project. According to the World Bank, South Africa will buy 2.5GW from Inga 3 and the Congolese mining industry will buy 1.3GW. The remainder will go to SNEL to provide power to about 7 million people in the vast ‘slumscape’ around Kinshasa with the aim of meeting all electricity needs there by 2025. Some of the funding will also come from the mine owners: Glencore, for example, recently loaned SNEL US$368 million towards the cost of refurbishing Inga 2.

Dr Maupin said: “The decision of Eskom (the South African public utility) to buy power has made all the difference because South Africa is a credible market. Even though the DRC needs electricity it’s a very small market; despite the fact it’s growing fast and developing, it’s not bankable.”

Maupin added that South Africa is not going to pay for the dam though: “It won’t work like that. They might pay for the transmission lines to make sure they can receive this electricity from the DRC but that’s all. The Congolese Government is struggling with finance at the moment and the idea is to have part of the funding provided by the consortium that builds the dam. There may also be money from international donors such as the World Bank and the African Development Bank and perhaps BRICS Bank and the Development Bank of Southern Africa. The World Bank hasn’t committed to funding construction work but they have funded feasibility studies. The stage of having a basket where they put all the money for the dam hasn’t been reached yet.”

“If we can support the african workforce
in the way that many developed regions of the world support their workforces then the level of productivity will be breathtaking.”

Dr Oladiran Bello, Governance of Africa’s Resources Programme

African empowerment

Then there is the social dimension. Electricity sets people – particularly females – free. A study by the US Rural Electrification Authority in the 1940s found that washing machines reduced the time required for dealing with a 38lb load of laundry from four hours to 41 minutes. In the DRC, 91% of the population has no electricity and so no washing machine. Add vacuum cleaners and electric stoves and pumps, which remove the need to find

water and firewood every day, and what you have is the end of domestic servitude and the beginning of a social revolution as women enter the workforce and gain power and status.

Dr Bello put it like this: “If we can support the African workforce in the way that many developed regions of the world support their workforces then the level of productivity will be breathtaking. People in our big cities get up at five in the morning for a two- or three-hour commute to their workplace. Africans are very entrepreneurial. If we could just solve some of these infrastructure gaps that force people to expend their energy on unproductive things, we can really set the entrepreneurial spirit free in many of these African cities.”

Transformation

Clearly the prospect of using Inga as a kind of ignition key for the wider African economy is an exciting one but as Dr Jennings points out, it isn’t new. “We’ve been through periods of big infrastructure development in the 1960s and 70s and the argument that was made then is the same argument that’s being made now – that it kickstarts development and sets other processes in motion by giving people and companies access to roads, rail, telecoms networks and power. What we found in the 60s was that it didn’t actually do those things.” But Dr Jennings believes there is evidence that Africa will avoid the mistakes of the 1960s. For one thing, governments and their civil services are more professional than they ever were before and they understand the need to build integrated systems. “If you look at some of the planning documents, you think yes, they’ve been relatively well thought out – it’s not just about building a lovely shiny new thing where the president grew up,” he said.

In the period after the oil crisis, Africa fell off the West’s radar and when it returned it was forced to follow the IMF and World Bank’s
‘structural adjustment’ policy package which
emphasised the export of
agricultural commodities
and minerals in a way that
reminded many observers
of the colonial period. This
policy caused a disastrous
collapse in the price of
produce, most notably
coffee, and was eventually
abandoned. Dr Jennings
said: “In the 1990s and
2000s, donors started
piling money into things
like governance reform
and civil society and then
around 2005 they started
to get interested in the
nuts and bolts of boosting
agricultural production
and industrialisation. Then
they started to focus on bottlenecks in the system, the major one being transport and energy.”

This fashion shift coincided with the entry of the Chinese and their policy of exchanging infrastructure for oil and minerals and with sustained economic growth – albeit from very low levels – and a series of national plans, all of which proposed ambitious infrastructure development programmes. We have seen the end of the ruinous second Congo war and Angola, Mozambique, South Sudan, Sudan, Liberia, Ethiopia and Somalia have all begun rebuilding after wars that lasted for a generation. Regional economic organisations have become significant players, the prospects of countries such as Uganda and Tanzania have been buoyed up by oil and gas discoveries and apartheid is a distant memory.

Dr Maupin agrees that the governance has improved and in the case of post-war DRC, she argues that the process of building infrastructure has in itself had a positive effect. “The country has suffered from war for decades; it’s a little bit like South Africa after apartheid. They’re starting from a different level but they’ve done a lot of capacity building, especially in their public administration, and they had to reorganise SNEL so that pushed the government to renew its electricity and energy policy.”

The issue of governance is important, because nobody is going to lend US$12 billion to another Mobutu Sese Soko, the former president who is alleged to have stolen the equivalent of five times the GDP and moved it out of the country. In fact, the World Bank is proposing an “autonomous and transparent Inga Development Authority which will follow best international practice in selecting the private concessionaire and negotiating power purchase agreements.”

At the same time, Dr Jennings cautions against subscribing to the uncritical ‘Africa rising’ narrative which ignores the problems brought by uneven growth and obscures the extent to which economies based on extractive industries are vulnerable to external forces, such as the growth rate of the Chinese domestic economy. And Dr Maupin emphasises that the Congo still

lacks pretty much every kind of basic infrastructure. For example, when she travelled from Kinshasa to the Inga Falls to see the existing dams, the roads could only just be negotiated with an ordinary car, “depending on how much you like your car.”

“Donors push this notion that ifyou have good governance, that creates development but there’s very little evidence it’s true and they never give good examples.”

Dr Michael Jennings, School of Oriental and African Studies

Democracy now

SAIIA’s Dr Bello said there is one aspect of the situation that is almost always left out of most discussions: “I’m very optimistic about Africa’s prospects but the reason why I’m optimistic is not because of what is happening in central governments, it’s because of the potential of African cities. I have in mind Lagos, Kinshasa and Nairobi in particular. You

are starting to see people demanding accountability from their city councils and city administrations are being voted in or out on the basis of their performance or their service delivery,”he said.

He points to the fact that there has already been an unnoticed infrastructural revolution in Africa – mobile telephony. It doesn’t take many wireless masts to provide coverage to dense urban city regions and Africans access the internet using mobile devices. Kinshasa has 1.3 mobile phones per individual, Nairobi two, and this connectivity has created a kind of spontaneous organisation within urban populations. “I think that’s where change is coming from,” said Dr Bello, “One step at a time and from the ground up. Kinshasa is a city on the move.” As an example he cites the appearance of eight-foot-high, solar-powered robots armed with cameras and red and green lights that regulate traffic. Dr Maupin’s own visits to Kinshasa confirm this view: “You can see more politicised movements and you can see that civil society groups are much more active. Kinshasa used to be a totally disorganised city, but now it’s turning into a metropolis where infrastructures are slowly being improved.”

The hope is that this bottom-up change based on revitalised civil society will connect with the top-down change based on infrastructure, international finance and economic development: the local and global. The point at which these two movements connect is the Congolese Government. If it can manage the change then the future for Africa really will be brighter.

 

 

PLEASE SHARE YOUR EXPERIENCES AND VIEWS IN THE COMMENT SECTION.

Photo Credit: Malinda Rathnayake from flickr

 

 

 

Previous
Next
SHARE
Previous articleJohn De Graaf: How I Would Change the World
Next articleRivers: The Earth’s Carbon Flushers
David is a freelance journalist based in London specialising in business and politics. For many years, he worked as the chief sub-editor of a magazine in London, before going freelance as a feature writer. A passionate history buff, he is working on his first novel set during the 1870 siege of Paris.

1 COMMENT

LEAVE A REPLY