The Long and Twisted Road to Build the Inga Dam
Hailed as the world’s largest hydropower project with a capacity of 40 GW and costing a whopping USD 80 billion, the Inga HydroPower Project (HPP) seems to have difficulties to take shape.
Now, five banks have banded together to look at ‘what can be done to get this project off the ground.’ The consortium comprises two South African state banks which are Development Bank of Southern Africa (DBSA) and Industrial Development Corporation (IDC). In addition, there are two pan-African banks: African Development Bank (AfDB) and African Export-Import (Afrexim) Bank. Finally, the #BRICS Bank, known as the New Development Bank (NDB), is also involved.
Two months ago, DR Congo signed a preliminary agreement with Nigeria Oilfield Services to build a 7 GW plant at the Inga site. This new agreement supplants an earlier one signed with Fortescue, owned by Australian mining tycoon Andrew Forrest, to develop a 40 GW complex.
Previously, the Fortescue deal itself superseded another deal struck with a consortium of Spanish and Chinese companies to develop a 11 GW plant, known as Inga III, for a cost of USD 14 billion.
South Africa has agreed in principle to purchase some of the green energy produced in all these deals. In fact, in a meeting in Abidjan in March 2024, AfDB President Adesina highlighted that the Inga HPP could contribute to alleviate the power shortage causing frequent load-shedding in South Africa.
AfDB President Adesina urged for ‘political resolve and commitment’ to set the ball rolling. Actually, when fully developed, the Inga Dam can supply power to ‘a dozen countries in Central and Southern Africa.’
Currently, only 1.8 GW of the Inga capacity has been developed via two small dams built some 40 years ago. The electricity is transmitted nearly 1,000 miles away to power Copper and Cobalt mines in the Katanga region. The mines are owned and operated by the likes of Glencore, China Railway Group and CMOC.
Given the huge investment needed, even the combined financial muscle of the five Development Finance Institutions (#DFI) might not be sufficient. However, the consortium hopes to bring the project development to a stage when other Multilateral Development Banks (#MDB) and the private sector will become interested.
As a generator of renewable and green energy, the Inga HPP can help reduce emissions substantially in the fight against #ClimateChange. Therefore, some innovative financing model involving #GreenBonds, #CarbonCredits and other #SustainableFinancing instruments might be put into play.
A few years ago, five SADC countries, namely Angola, Botswana, Namibia, Swaziland and South Africa, came together to explore the possibility of co-developing the Inga project together. It is expected that the project might be raised and discussed in the upcoming #SADC Summit in August 2024.