Efforts in the DRC are redoubling to make the country’s long-delayed vision of building the world’s largest hydroelectric dam on the Congo River a reality. Bruno Kapandji Kalala, Project Director for the Agency for Grand Inga Development and Promotion Agency (Agence pour le Developpement et la Promotion du Projet Grand Inga, ADPI) explains what progress is being made on the project and how the government is encouraging the private sector to take part in a project that could be a major supplier of electricity across the continent.
Could you please make a quick assessment on the Democratic Republic of Congo’s Grand Inga dam project, the most important energy project at a continental level? How is it coming along?
The Grand Inga project has been around since the early twentieth century. Already at that time, we were thinking of building such an infrastructure. Following energy deficits in Congo and in the sub-region, and because of the low access rate of the population to electricity, an analysis demonstrated that the country had potential, that is to say 100,000 MW of hydroelectric potential, among which 42,000 MW is concentrated at Inga and the rest scattered across the entire country.
It has been proven essential and necessary to carry out this Grand Inga project to satisfy, first of all, the energy needs of the nation, but also to satisfy the needs of nearby countries and countries further abroad.
On October 13, 2015, the President took over the management of this project from the Ministry of Energy, as was the case with the successful 1st and 2nd parts of the Grand Inga project, built in 1972 and 1982, respectively. He created, as part of his cabinet, the Agency for the Promotion and Development of the Grand Inga Project (ADPI). Since the creation of the agency, a situational analysis of this project has been done. Then, the objective to realize this project as quickly as possible was set. All of this was meant to satisfy both national and international demand for electricity, particularly that of South Africa, so we signed a treaty in 2013 with South Africa to supply them with electricity by 2020.
This treaty is the main reason we took this decision, and it is also a way for the Congolese authorities to demonstrate their commitment to this project. We also are in a promotional phase. There is no better project promoter than the country’s head of state.
This agency set goals, namely in terms of time, regarding the previous commitments taken towards national and foreign demand, in particular South Africa.
The objective is to start the project by the end of 2016 in some form. An action plan has been developed, consisting of, firstly, an inventory of all the studies which were necessary for the various candidates to present their offers. Several consultations took place with the candidates in regards to the technical, financial, environmental and social aspects of their projects. The investors financing the operation – namely the World Bank and the African Development Bank – and consultancies assisting the Congolese government in the preparation of this project were involved.
Secondly, it was necessary to gather all the candidates, and by common consent it was decided that it was possible to start this project in 2016. So the program is no longer built with a ‘bottom to top’ approach, rather from ‘top to bottom’ – i.e. from the goal to the actions that must be taken. That is why we reduced some deadlines for studies and redistributed some actions and studies to be led – some by outside consultants and others by candidates.
Today, we are comparing offers by two candidates within the following criteria: the capacity to realize such a project, previous experience, and the capacity to manage and find funds for such a project, while respecting the base retail price per kilowatt hour.
This project will have a decisive impact on the country’s energy supply, combining existing energy with new renewable energies. What can you tell us about the future of energy in the DRC once the Grand Inga dam is completed, taking into account the potential of renewable energies?
Since 2013, the DRC has had a strategic plan for the energy sector that extends through 2030. This policy firstly consists of doubling the rate of the population’s access to electricity by 2017. That means going from 9% to 18 %. But it also consists of satisfying the demand of households, industry, government administration, and neighboring countries. This policy is based on three axes, namely:
1. Major customers in industry and cities;
2. Major customers in the mining sector, based mostly in the Katanga province;
3. The general population, of which approximately 90% are living in rural areas.
The general population has been taken into account in the new policy. As Minister of Energy, I created an atlas, or inventory, of all the country’s exploitable sites where it is possible to produce renewable energy with water, through micro power plants, with the sun, through photovoltaic panels, with biomass, and so on. These solutions are essentially for rural areas.
But what about urban areas and large-scale industry?
We can also produce electrical energy with hydroelectric sites both for cities and industry. But that would take lot of time to implement and would be extremely costly mainly because of the country’s size.
Hence, the implementation of interconnected energy hubs in the capital of Kinshasa, the Bas-Congo province in the west, the Katanga province in the east: these precisely are the connections of the Inga line from Kinshasa to Katanga, and with the Kivu region’s Ruzizi I, II, III and IV power plants.
Therefore, the existing Inga plants and the Great Inga project overall play an important role in electrifying the country. But for other provinces, which are not directly going to benefit in the short term from Inga's power plant, some medium power stations will be built for them. Coherence and efficiency are the words that define best our new approach to the energy sector.
Regarding the sector’s liberalization, it is very important to underline how the private sector is going to take part in this country’s development. How will companies benefit from this deregulation in terms of profit margins?
First of all, why did we liberalize the sector? A study was made. The energy sector, in particular hydroelectric power, is very capital-intensive, and the State, whether at a national or provincial government level, does not have enough cash to develop this sector. In an effort to continue increasing the population’s access to electricity and guarantee electricity supply for all, whether at domestic or industrial level, it was necessary to find innovative strategies to attract the private sector, by providing guarantees and opportunities.
There is, first of all, the investment code that already provides many opportunities. But there are aspects of the law itself that are particularly beneficial; in particular the concessions, authorizations given to the private sector to facilitate the realization of these projects and, especially, allow sustainable and long-lasting return on investment.
Investing means putting savings into hydroelectric projects for several years, that is 10, 15 or even 30 years for large projects such as Inga. But other small-sized projects would require 5 to 10 years to make a return on investment. And once the investment is paid off, you can continue to benefit from it in many ways, given that generally there is not only electricity, but also opportunities to create other companies that can benefit from this electricity.
So all the opportunities are created to give companies the guarantee to make money for a long time because as long as there is water, there will be electricity and as long as there is electricity, there will always be customers. You can either create new industries yourself and therefore create demand, or attract other partners in the industrial sector.
Thus, this law provides a legal framework, but also a reassuring context on both financial and legal aspects. But because the investors can go wherever they want, it is necessary to keep in mind that the retail price of the electricity forms an important aspect of the attraction. That's why the law included the creation of a Regulation Agency in the energy sector. All necessary measures will be taken to create the best possible climate for the private sector, the general population and the State.
It is really an attractive system aimed at investors to participate in the development of various projects. With all the advantages that they are granted, we are sure that they will increasingly want to come.
For instance, Angola passed a law on liberalization after DRC. But the information on the internet shows that thanks to this liberalization, which only dates back to 2015, there are already two large investments in Angola to build two power plants: respectively a 2,700 MW plant and a 700 MW plant. Under this law, electricity sector developers are going to benefit from legal advantages for their investments, and the population will not be forgotten since it will benefit from these private sector investments through energy access.