Giant hydroelectric project tallies with World Bank’s mission

Meike van Ginneken, the World Bank Group's Energy Practice Manager for Central & West Africa, explains why the bank is supporting what will be the world’s largest hydroelectric power plant when completed.

Ms Ginneken spoke to Power Engineering International this week about some of the motivations and logistics behind the hydroelectric project in the Democratic Republic of Congo (DRC) as well as the World Bank’s approach to the environmental aspects associated with Inga 3.

The bank has rowed in behind the 4800 MW project, being led by the DRC and South Africa and set to cost £12bn, by financing the environmental and social impact studies associated with its development. It will have obvious benefits for power-poor DRC as well helping South Africa to reduce the shortages that dog its economy. In addition it will help provide more energy security for the mining companies within the region of Katanga, Africa’s largest copper producer.

The board of the bank approved $73m to go towards the studies involved in Inga 3 as well as other mid-sized hydro projects elsewhere in the country. In terms of Inga itself, the soundings from completed studies are positive.

“The feasibility study done on Inga gives us a baseline idea of the impact. That impact is relatively limited for the size of the installed capacity, it’s a very small reservoir, there is no dam on the Congo River, and there is very little displacement,”Ginneken told PEi. “Only 17 per cent of the Congo River will be diverted so the downstream impact is also relatively limited.”

“One of the challenges of the site is that the baseline data of the Congo River, both from an ecological or hydrological view, are very limited so we are investing a lot in baseline data. The site will potentially benefit from further developments going forward.”

Among the many criticisms projects of this size draws is the remoteness of the facility from some of the areas it must serve. Enabling that 4800 MW of power to get to where it will be primarily used appears at first glance to be prohibitive from an expense point of view. In particular transmission of the power to South Africa entails a distance of over 3000 kilometres.

“It will require the construction of some very long transmission lines,” agrees Ginneken. “The current plan is to sell about half the capacity of Inga 3 to Eskom in South Africa (2500 MW). 1000 MW is designated for the DRC’s public grid and 1300 MW to the mining industry in Katanga. This will require transmission lines from Inga to Katanga and from the Katanga border to South Africa. The lines are currently being studied and will require considerable investment. The same feasibility that was carried out with financing from the African Development Bank determines that even with the required investment in the transmission lines the price of the electricity generated at Inga will be competitive vis-à-vis other sources of energy in South Africa and therefore the project is economically viable.”

Ginneken says the World Bank is highly conscious of its environmental and social obligations in participating in such a giant project and isn’t averse to the criticism that comes with it.

She says the bank sees itself as having a monitoring role in ensuring communities concerns are heard, and most importantly it doesn’t provide its backing until satisfied that a project meets its own criteria in "boosting prosperity and ending poverty".

“We welcome environmental and social groups monitoring our work and what is happening with hydropower around the world and I think it’s very good they bring up the concerns that they have and they will be addressed as the project moves forward. Of course the specific concerns of local communities will have to be taken into account. This is an ongoing dialogue and while the government of the DRC is leading in its development, we are happy to accompany them to make sure that people’s concerns are being taken into account.”

There is no doubt that Inga 3 will have a transformative effect on the regions it serves. That it can do so while having a relatively minimal impact on the local environment represents a major plus.

“It will bring much needed energy to the population of the DRC, which has one of the lowest accesses to energy in Africa – currently at 9 per cent,” Ginneken says, while also reminding detractors that “it will have the potential to bring affordable, reliable and sustainable power to the people of Congo and light to the homes of the Congolese. With the large volumes of energy going to Katanga and South Africa it will spur economic growth in the continent and will do this with a very small carbon footprint.”

“That’s especially true of South Africa – the alternative for the South Africans is coal development and the development of Inga will have a negligible influence on climate change by comparison.”

Recent reports in other media outlets suggested the World Bank is wavering on that issue of financing coal but Ginneken says the position hasn’t changed.

“The World Bank Group’s policy on coal remains the same. The WBG will provide financial support for greenfield coal power generation projects only in rare circumstances. Considerations such as meeting basic energy needs in countries with no feasible alternatives to coal and a lack of financing for coal power would define such rare cases.”

In any case, she says, Africa is blessed with an abundance of power choices that make the possibility of opting for coal unnecessary.

“I think it’s a case of maximising the energy mix of the different countries in Africa. The continent has tremendous energy resources. It has hydropower, geothermal power potential in the Rift Valley and it also has a lot of natural gas resources in the west in Nigeria Ghana and Mauritania and in the east, in Mozambique and Tanzania.”

“On top of that, the wind resources in east Africa and the solar resources in the Sahara are considerable so what we are doing is helping countries to develop their energy generation plans into the future on a needs-cost basis because we have to see how these energy resources of Africa can come together to ensure that Africans have affordable, reliable and sustainable energy. We don’t have predetermined ideas of what such an energy mix should look like because it depends on the resources of the country.”

Despite such splendid on-paper resources it should be noted that the total power generation capacity in Africa is about 80,000 MW (including South Africa), roughly the same as that of Spain or South Korea. One in three Africans (600 million people) has no access to electricity. Neither do some 10 million small and medium-sized enterprises. Homeowners and businesses fortunate enough to have power pay three times as much as those in the US and Europe. Meanwhile, power outages routinely cost economies one to four percent in lost GDP every year.

The World Bank’s financial and expertise heft is therefore vital if the continent is to add the 7000 MW of generation capacity it will need each year to meet the projected growth in demand. Right now it is achieving only 1000 MW of additional power generation annually.

As well as the significant progress being made in attracting global investment in Africa’s infrastructure to date, the bank will continue to have a crucial role, through instruments such as Project Preparation Facilities, guarantees, and insurance, in ensuring that badly needed and hard won-investment continues into the future.