One of the largest infrastructure projects in Africa has come under a cloud as South Africa fields pressure to withdraw its commitments to a proposed dam in the Democratic Republic of the Congo, or DR Congo.
Construction of the Inga III hydroelectric dam is expected to cost around $14 billion, with the project projected to produce up to 11 gigawatts of power a year. South Africa has committed to buy 2.5 gigawatts of annual supply.
Pretoria's purchase commitment is not only critical to the construction of the project but also important to South Africa, which has been experiencing increasingly severe power outages over the past two years that are damaging its economy.
The Congo Research Group, an independent, nonprofit organization and Phuzumoya Consulting, a Cape Town-based consulting firm, have advised South Africa to cancel its commitment to the project. They say that power from the Inga III dam would be risky and may prove more expensive than that from domestic sources.
In a report dated March 19, titled "I need you, I don't need you: South Africa and Inga III", they said the resulting uncertainty about whether South Africa will be an anchor client for the project puts into question the bankability and the feasibility of the whole project.
The report said the proposed annual purchase of 2.5 gigawatts of power from the project would cost South Africa $12 million per year, more than what it would spend on power derived from local sources.
Additionally, South Africa would be required to construct a new transmission line from Inga to the DR Congo border, and then to South Africa.
The length of the proposed link between Inga and the Zambian border, according to the report, is 2,300 kilometers, and would cost more than $1 billion to build.
The report quoted Mbulelo Kibido, the head of grid planning at power utility Eskom, as saying that a new line would cost $480,000 per km, excluding that required for the substations.
Each substation would need two transformers, each costing $27.42 million and unaffordable for an economy in recession, he added.
Kibodo said South Africa does not need more energy, as it expects to add 11 gigawatts from the Medupi and Kusile coal plants due to be completed this year.
Supply starts in 2030
Officials from the South African Department of Mineral Resources and Energy in November 2019 told a parliamentary committee that since Inga's construction will take an estimated seven years, it should start by 2023 in order for South Africa to begin receiving supply in 2030.
Failure to meet the construction target would see South Africa consider as lapsed an underpinning contract signed in 2013. The country would then look to source the 2.5 gigawatts elsewhere, the officials said.
Despite these pressures, the South African government has continued to express its commitment to underwriting the building of the project, arguing that Inga III will aid Africa's industrialization, help diversify South Africa's energy mix and increase the country's renewable energy sources.
South African President Cyril Ramaphosa recently reaffirmed his government's commitment to "fast-track" the Inga III project.
The vision for the Inga dam complex on the Congo River has long been touted as a potential provider of electricity for the DR Congo and the entire region.
To be built west of the capital Kinshasa where the river's level drops by 96 meters over 14 kilometers, the project has an estimated potential of 40 gigawatts of power generation. If fully developed, the site could become the largest hydroelectric dam complex in the world. Two dams have already been built there, with Inga I producing 351 megawatts and Inga II 1,424 megawatts.