World’s Biggest Power Plan (Inga 3) May Be Thwartehttps://www.bloomberg.com/apps/news?pid=20601109&sid=aQ6J7V.9mFYQ&pos=15
World’s Biggest Power Plan May Be Thwarted by Congo (Update3)
Feb. 26 (Bloomberg) -- A plan to build the world’s biggest power complex in the Democratic Republic of Congo may never happen because the government is too indecisive, the head of a venture that had planned to invest $5.2 billion said.
Western Power Corridor, a venture between five African countries, had planned the first stage of the complex on the world’s second-biggest river, that could yield 100 gigawatts of power for markets as far afield as southern Europe and the Middle East. Yesterday, Congo’s national power company said Western Power, known as Westcor, will be dissolved.
“If we’re struggling with a 5,000 megawatt project, how are we going to get a 100,000 megawatt project off the ground?” Pat Naidoo, chief executive officer of Westcor, said yesterday from Durban, South Africa, after learning that his company will be closed. Congo is weighing an offer from BHP Billiton Ltd. to use some of its power generation potential.
Westcor’s Inga 3 project was envisaged as the first step in harnessing the Congo River, the second-biggest by volume after the Amazon, at a cost of tens of billions of dollars. The African Development Bank is planning a feasibility study this year for a “Grand Inga” project that could yield between 40,000 and 50,000 megawatts. Congo has the potential to produce 100,000 megawatts of hydropower, the World Bank has said.
Three Gorges, Itaipu
Currently China’s Three Gorges hydropower complex is the world’s biggest with a generating capacity of 22,400 megawatts while Brazil’s Itaipu, with a capacity of 14,000 megawatts, is the second largest.
“It was a big decision,” Yengo Massampu, the chief executive officer of Congo’s National Electricity Society, said in an interview. It would be good for Congo to retain more of the project’s electricity for its own use, he said. “Each country needs to look at how it can develop itself.”
Congo is in talks with BHP Billiton about using as much as 2,000 megawatts from a future hydroelectric project for an aluminum smelter in the country’s western Bas Congo province, Illtud Harri, a BHP spokesman, said by e-mail.
“The future of the aluminum smelter project hinges on progress being made on the Inga 3 project and it is still very early days,” Harri said.
BHP is Africa’s biggest aluminium producer with two smelters in South Africa and one in Mozambique.
‘Clever Move’
“There’s a lot of benefit for the Democratic Republic of Congo in not selling the electricity and using it for private investment,” Cornelis van der Waal, an energy analyst at Frost & Sullivan in Cape Town, said in an interview. “For BHP it’s a clever move. It’s a blow for inter-Africa relations.”
Westcor had held talks with BHP, Naidoo said.
“We called BHP Billiton and we told them to come and join us,” he said. “Probably they overtook us.”
BHP’s Harri declined to comment on the talks.
“It is bad faith” from Congo, Kiala Pierre, the director of international cooperation at Angola’s energy ministry, said in an interview in Luanda, the country’s capital. Amendments made by Congo to the venture’s agreement would have resulted in it becoming “nothing,” Pierre said.
The amendments were introduced on Feb. 20, he said. “We regret this because the project was such a model of regional cooperation.”
Under the Westcor plan Inga 3 promised 2,000 megawatts of power each for Congo and South Africa, as well as a combined 1,000 megawatts for Angola, Namibia, and Botswana, Naidoo said.
“There were five governments behind this project and the DRC part always kept falling off the pedestal,” Naidoo said. “The other four are intact and united, strong as can be.”
Blackouts, Rationing
The project would have generated $2.2 billion dollars annually for the shareholders, he added. Congo would have received $500 million per year for the use of the river as well as a new factory for maintenance and repairs, he said.
Westcor was about to start a detailed engineering study on Inga 3, Naidoo said. The plant was supposed to start generating electricity by 2012 and reach full capacity in 2015.
“You couldn’t find a better project,” he said. “Maybe this is mother nature’s way of saying ‘don’t come and disturb me.’”
Southern Africa had planned to use the project to meet an electricity shortfall after South Africa, which has traditionally supplied its neighbors with power, delayed investment in power plants leading to blackouts in its cities and rationing of power to mines and metal smelters.
Zambezi Alternative
South Africa’s national electricity utility, Eskom Holdings Ltd., is planning to spend 460 billion rand ($59 billion) on expansion over the next five years to address the shortages and is seeking opportunities to expand further including the purchase of power from plants in other countries.
“Other projects will come to the fore, that’s what’s going to happen now,” Naidoo said.
Westcor’s member countries will need to begin to look at alternative energy sources, Naidoo said, including nuclear, thermal power plants and natural gas as well as hydropower from the Zambezi river which runs between Zambia and Zimbabwe and into Mozambique.
“The drawback with the Zambezi is that at times” its flow dwindles, he said. “The Congo river is constant at 30 thousand cubic meters per second.”
Congolese ministers have been asked to come up with a new plan for the project’s development to present to Westcor’s shareholder-nations at their next meeting in April, Massampu said.
To contact the reporter on this story: Michael Kavanagh in Kinshasa on mkavanagh@bloomberg.net