Flipping the switch on Inga 3?
The SA government remains committed to its Inga 3 hydropower project with the DRC. But a recent report raises doubts about its feasibility
Delays to the ambitious Inga 3 hydropower project in the Democratic Republic of Congo (DRC) could be aggravated by the Covid-19 pandemic, but SA has vowed to honour its commitment to the project — for the sake of the continent.
Inga 3 is expected to add 2,500MW (about 5%) to SA’s energy mix by 2030. But critics have warned that the project, to which then president Jacob Zuma first pledged support in 2011, is unaffordable and impractical.
In a recent report, "I Need You, I Don’t Need You: SA and Inga 3", the New York-based Congo Research Group and Cape Town-based Phuzumoya Consulting warn that the $14bn project will be "risky and may be more expensive than most other [power] sources available".
It quotes Eskom’s head of grid planning, Mbulelo Kibido, as saying that the transmission line to SA, estimated to be over 2,000km, is unaffordable. "Inga makes no business sense for us," he said. "And there is no budget for it." (Pressure group International Rivers puts the cost of Inga 3 at as much as $80bn if cross-continental transmission lines are taken into account.)
Energy policy and investment specialist Prof Anton Eberhard, of the University of Cape Town’s Power Futures Lab, tells the FM there are many uncertainties around the Inga 3 expansion related to financing, construction start and the very long international transmission lines, which mean the energy will not be available to SA by 2030. "For that reason the next IRP [Integrated Resource Plan] update should exclude it in the medium term," he says. "It could be replaced by the least-cost mix, which is solar plus wind plus gas, or another flexible storage technology."
Eberhard says hydro was not in the initial least-cost scenario of the IRP, but was forced into the plan because of SA’s agreement with the DRC.
Under the 2013 agreement, construction on the project has to start by 2023. Thabang Audat, acting deputy director-general energy policy & planning at the department of mineral resources & energy, says: "If nothing happens within that initial 10-year period, the treaty will fall off unless the parties (ourselves and the DRC) agree to extend [it]."
But the Congo Research Group report notes that the Congolese authorities "have not yet carried out critical impact assessments, an alarming prospect for a project that will block off most of the Congo River".
Disagreements between the shortlisted construction consortiums — China’s Three Gorges Corp and Spain’s Actividades de Construcción y Servicios (ACS) — have also contributed to the delay. The two consortiums signed a preliminary agreement in 2018 to jointly develop the 11,000MW project. But Audat says a Reuters report that ACS would be pulling out of the project is incorrect.
Government officials are supposed to visit the DRC to establish "how far the [country] is on procurement", says Audat. But the meeting — set for this month — will likely be postponed due to the lockdown.
Audat takes issue with the recent report on Inga 3. For example, he says the hydropower plant and transmission lines will be built by private consortiums, so SA will not pay anything upfront, except if it exercises its option to procure equity in the project. He also says the cost of electricity from the project will be locally competitive.
SA’s commitment to buy a share of the electricity is crucial to the project proceeding. "Most banks that are willing to finance construction of the dam have indicated that they trust the SA government’s commitment to pay as long as power is delivered," he says.
The government, for its part, remains committed to the project. President Cyril Ramaphosa told leaders at the AU summit in Addis Ababa in February that Inga 3 is one of four continental infrastructure projects SA will be fast-tracking through the Presidential Infrastructure Champion Initiative. The others are the Beitbridge border post project, the Lesotho Highlands water project and the establishment of SA as a continental hub for the manufacture and supply of rail stock.
But while MPs were positive about the project initially — ambassador Ntsiki Mashimbye told parliamentarians in 2014 that Inga 3 was "epoch-making" — they have lost enthusiasm. In 2018, energy portfolio committee chair and ANC MP Tandi Mahambehlala expressed concern about cost overruns and the possible effect of political instability in the DRC.
Opposition parties are even less optimistic. Kevin Mileham, the DA’s spokesperson on energy, says the project is "an absolute pipe dream" because the DRC government "can’t seem to get it together" and because of funding issues. "What worries me is there is a political agenda, a bigger Africanist agenda of the ANC, and it’s ignoring SA’s security of energy in the interest of African unity," he says.