Congo's Grand Inga dam: of power, and powerlessness

A really good, in-depth article..

http://mondediplo.com/2011/02/10drc
/Le Monde diplomatique/*,* English Edition, February 2011
*The needles are stuck on zero*
*Dams that could power Africa*
/*The Democratic Republic of Congo has mineral resources the world
covets and its Grand Inga dam project could provide 40% of Africa's
electricity needs. But the average citizen is unlikely to benefit*/
by Tristan Coloma

Last October I had to wait nearly three hours for my accreditation to
be printed out at the press and communication ministry in Kinshasa, in
a room without air conditioning. The electrical current in the
Democratic Republic of Congo (DRC) is neither direct nor alternating:
it is intermittent. "We must wait for the minister to get back," said
an official. "He's the only one who can give us permission to start
the generators. With SNEL [the national electric power company], you
never know when the electricity will come on again." Because of the
frequent power cuts, the tired old generators are often called into
service.

The DRC is not an isolated case. The International Monetary Fund
warned in 2008 (1) that in most sub-Saharan African countries
infrastructure deficiencies (in energy, transport, water, and
information and communication technology) caused 30-60% of business
productivity losses and cut economic growth by two percentage points
every year. But building new facilities and repairing old ones would
mean spending $93bn a year between 2006 and 2015, roughly 15% of
Africa's GDP (2).

Electric power represents 40-80% of infrastructure deficiencies. The
media are indignant that one African child in three fails to complete
primary school education, but rarely interested in the fact that more
than three in every four children have no access to electricity. At 68
gigawatts (GW), the entire generation capacity of the 48 countries of
sub-Saharan Africa is no more than that of Spain; and without South
Africa, the total falls to 28GW, equivalent to the installed capacity
of Argentina. Perhaps a quarter of this limited capacity is currently
out of action. Each African has access to only 124kWh of electricity a
year - enough to power a single 100W light bulb for three hours a day.
African manufacturing companies report power cuts on an average of 56
days a year, costing them 5-6% of their revenues (3).

Things are even worse in the DRC, where more than 94% of the
population has no electricity at all. Even being connected to the grid
doesn't guarantee light, since electricity is rationed. Power cuts
make daily life an ordeal: urban crime is rising in the darkness,
hospitals have trouble keeping vaccines fresh, drinking water supplies
are interrupted because the pumps keep stopping, and the chore of
fetching water and firewood consumes time and energy. People often
find irregular solutions, sometimes at the risk of their lives; many
get electrocuted while trying to connect illegally to the grid.
Foreign embassies and the offices of the UN Stabilisation Mission in
the Democratic Republic of the Congo (Monusco) enjoy a more regular
supply and the surrounding areas are crawling with "traders" who will
tap into the power grid and recharge a mobile phone or make
photocopies in the street.

*Enough for nearly half of Africa
*The potential for hydroelectric power in Africa is huge, but only 3%
is actually being used (4). The DRC could be an important player: the
Congo river, especially around the Inga rapids in the province of Bas-
Congo, could allow it to generate up to 110GW. Once the Grand Inga
complex is built, it may produce as much as 44GW, twice as much as
China's Three Gorges dam and enough to supply 40% of all Africa's
needs from Cairo to the Cape of Good Hope.

Hope is what the project survives on. Two dams, Inga I (built in 1972)
and Inga II (1982), are already in place. The complex is linked to the
capital and to the mining region of Katanga by a 1,700km high-tension
line. Because of its strategic importance, Inga is guarded like a
fortress. "In August 1998 the RCD [Rassemblement Congolais pour la
D�mocratie] rebels came in by plane and tried to cut the power and
bring the country to a standstill," said Inga's director, Ali Mbuyi
Tshimpanga. The meeting room has big windows from which there is a
magnificent view of the rapids but the curtains are always closed.
Everything about the room indicates shortage of funds. Surrounded by
slogans on unreliably backlit panels and technical drawings displayed
on wobbly tripods, Tshimpanga explained that the site should,
theoretically, produce 1,800MW. But the needles of most of the dials
in the machine room are stuck on zero and the actual output is barely
875MW.

Inga's technical chief Claude Lubuma explained: "Inga I has six
generators, of which three are not working. Inga II has four that are
working, three that will be repaired with a World Bank loan and one
more thanks to a loan from the African Development Bank." The decrepit
wall of the conference room mocks the slogan of the Mobutu era: "Inga,
Africa's greatest source of power, available for Africa." The site
needs funds. But after 30 years under a dictator and a decade of war,
the DRC is high on the Failed States Index (5). Even at an average
economic growth rate of 5.5%, it would take until 2060 to get back to
the per capita income level the country had at independence in 1960.

Yet though the DRC has huge natural resources, it is a "heavily
indebted poor country" (HIPC). According to business analyst Stuart
Notholt, writing in the February 2009 issue of/ African Business/, the
DRC's mining potential is estimated at $24bn - the equivalent of the
combined GDP of Europe and the US. But the DRC has fallen prey to
greed and is no longer its own master. Fighting over resources and
political instability have hampered maintenance work at the Inga
facilities and stunted economic development. The government coffers
are empty (6). An SNEL executive, speaking anonymously, admitted: "The
power network in this country is what the Belgians left behind, and
it's obsolete. We're on the brink of disaster. Customers have to buy
their own cables as SNEL doesn't have the money to replace faulty ones."

Clientelism and obsolete management methods have made it impossible to
finance infrastructure projects; the state charges far less for
electricity than it costs to generate. A member of staff of the
European Investment Bank explained: "In the vast majority of sub-
Saharan African countries, electricity tariffs are subsidised and have
not changed since the 1970s, as they are a powerful electoral tool. We
can't make any progress if things stay this way." But how can you
raise the price of a service the vast majority of the population can't
afford?

In Kinshasa, a sandstorm gave way to a tropical downpour that
interrupted electricity to the entire capital. Darkness enveloped the
ministry of infrastructure, public works and reconstruction. The
poster with the slogan for President Joseph Kabila's "Cinq
Chantiers" (five areas of reconstruction) policy - "With courage and
determination, we can rebuild and modernise the Congo" - is already a
distant memory. The minister, Fridolin Kasweshi Musoka, said: "To be
able to invest in infrastructure, SNEL would have to raise the price
to the consumer by 400%. The problem in the energy sector is the
public service aspect of supplying electricity."

Bernadette Tokwaulu, acting deputy managing director of SNEL, felt
that interference by politicians in the management of public
enterprises didn't help: "Brewers don't pay the standard tariff for
their electricity. They get subsidies from the government under the
heading of development aid. And the authorities require us to provide
lighting on the Boulevard du 30 Juin, but that shouldn't be a
priority. It's the same with the lighting at Kikwit, which only serves
the interests of the prime minister, since it's his fiefdom." In
Africa, this interference can mask official corruption (7), even if
there have been a few show trials as part of President Kabila's "zero
tolerance" anti-corruption campaign.

To make up its funding shortfall, the DRC has turned to international
aid. The energy minister, Gilbert Tshiongo, explained: "The funding
basically comes from traditional funding providers - mostly
multilateral and bilateral financial institutions such as The World
Bank, the African Development Bank, the European Investment Bank, the
Arab Bank for Economic Development in Africa, the EU, KfW
Entwicklungsbank and Finexpo (8). But the Bretton Woods institutions
(the IMF and The World Bank) have criticised SNEL for its
unprofitability and inability to fulfil its mission. The aid they
offer is conditional on reforms that would establish the principle of
electric power liberalisation and private sector participation at
every stage of the supply chain (9).

*Private funding
*Many protest against this. Franck M�riau, an energy consultant in
Kinshasa, told me: "In Africa, the IMF and the World Bank are asking
the private sector to develop electric power, while in the rest of the
world it's the public sector that has undertaken this task. The World
Bank's strategy is to bring public enterprises to their knees and show
that they are useless so as to justify their privatisation." Few
people at SNEL agree with the current programme of reforms. Tokwaulu
added: "If the electric power market is opened up, the private sector
will take the profitable captive segments and leave SNEL the
unprofitable 'public service' segments, which will only make SNEL's
debt worse ... By definition, it's the government's responsibility to
ensure the provision of basic utilities such as electricity, and it
should face up to that responsibility." Privatisations of this kind
could lead to the formation of monopolies. Many sub-Saharan African
countries have yet to put regulatory frameworks in place.

According to the energy ministry, stabilising the electricity supply
and doubling coverage by 2015 would cost the DRC more than $6.5bn.
Infrastructure projects involve massive investment and long loan
repayment periods, and yields are unreliable. Of 987 million Africans,
500 million have a mobile phone, but 700 million don't have
electricity. Telephone networks are cheaper to build than electricity
networks and provide a quicker return on investment.

Alain Bokele, SNEL's director for the Kinshasa district, was
overwhelmed with work: "It's really complicated. We have put out a
tender for the modernisation of the network, but people aren't falling
over each other to bid." Tshimpanga had noticed the same phenomenon:
"Public-private partnerships (PPPs) are rare. In Katanga, SNEL is
collaborating with a few mining companies, such as TFM and KCC. The
problem is that, with a PPP, you patch up only the part of the grid
that interests the private financiers. It's of almost no benefit to
the community."

Everyone offers a different prognosis. Some hope that the global
crisis will serve as a catalyst for investment by the BRICs (Brazil,
Russia, India and China) and by the Gulf states, Turkey and South
Korea. The UN conference on trade and development's Economic
Development in Africa Report 2010 says weaker prospects for growth
among the advanced economies mean that economic relations between
Africa and other developing regions are likely to become more
important. The DRC's mineral resources are attracting foreign
investors. M�riau told me: "Development in Africa is based on
usefulness to foreign enterprises. They invest a lot in ports,
airports, roads and infrastructure - anything that helps them to carry
off the continent's raw materials. In fact, all PPP projects are
mining and export-related."

The world's leading mining company, BHP Billiton, needs more than 2GW
of electricity to power an aluminium factory it is hoping to build in
Bas-Congo. The company is looking at collaborating with the DRC in the
construction of a new hydroelectric dam: Inga III. Studies suggest the
project could produce up to 4.3GW for an investment of $7bn. Bienvenu-
Marie Bakumanya, a reporter for the Congolese newspaper/ Le
Potentiel/, said: "BHP Billiton wanted to reduce the plant's capacity
to 3.5GW or even 2.5GW, so as to limit production to its own needs and
keep the bill down."

*Contract of the century
*To complete Inga III by 2020 and the first phase of Grand Inga by
2025 (initial capacity 6GW, rising to a potential 44GW), the Congolese
government needs to raise $22.1bn. The energy minister is working
closely with the minister for mines. He is hoping that, in return for
concessions, the mining companies will pay for the electricity to be
generated and conveyed to the mines - and to surrounding communities
if there happen to be a few megawatts to spare. This kind of
cooperation would be at the expense of African integration. Another
project had been put forward by the Westcor consortium, which involved
five countries (the DRC, Angola, Zambia, Botswana and South Africa)
but, in February 2010, at the request of the DRC, the consortium was
disbanded. The agreement was unfavourable to the DRC, since it would
have given the party states equal shares in the dam with the DRC. The
project went no further.

SNEL's research and development director, Waku Ekwi Mapuata, said:
"SNEL doesn't have the technological or financial resources to
complete the work alone." The West has taken the lion's share in
Africa so far, and countries of the South are picking up the crumbs.
In 2006, less than a quarter of the aid from traditional funding
providers went to the production sector. If the Europeans had worked
at developing the private sector, their grip on the mining industry
would have been weakened. The South invests not only in primary goods
but also in major power generating, transport and sanitation
facilities. The "contract of the century", which the DRC signed with
three Chinese companies in September 2007, involves the building of
infrastructure and large bank loans in return for preferential
treatment in the exploitation of natural resources. This ambitious
programme recalls the old colonial approach, linking commerce, aid and
direct foreign investment. But these "win-win" agreements could be
masking a con.

China's professed anti-colonialism and Afro-optimism has filled
President Kabila with enthusiasm. In 2007 he said: "We will make the
DRC the China of Africa." Lambert Mende Omalanga, the DRC's
communications minister and spokesman for the Kabila administration,
felt the arrival of the Chinese had saved the DRC: "It's a new kind of
cooperation and it suits us. When they impose it on you, setting very
stringent conditions, you don't feel as if you are accepting charity."

Once called "Kin' la Belle" (Kin' the Beautiful), Kinshasa has long
since ceased to deserve the name. Yet "Kin' la Poubelle" (Dustbin
Kin') is improving. Radio presenters still broadcast messages
exhorting those who have not eaten today to resist temptation and not
to lose faith, because "God, in His mercy, may give you a piece of
bread before the day is over." The Congolese still hope for a less
miserable future, especially now that there are asphalted roads, new
housing and ever more crowded stadiums. The authorities are happy at
the number of construction projects and the rapidity with which they
are executed. Electorally, these changes benefit the ruling party. "In
10 years, we will have 15,000km of road built, rather than the 700km
we'd have had with the traditional providers," said Omalanga. (He was
alluding to The World Bank, as representative of western funding
providers; it planned to renovate 10 turbines at Inga I and II, but
has postponed the project for a second time as, owing to the financial
crisis, it is unable to find sufficient funds. The renovation of all
the Inga turbines, originally scheduled for 2012, may not be completed
until after 2016.)

The DRC is no longer quite sure on whom it is dependent. Conflicts of
interest are developing between the emerging economies (China in
particular) and institutional funding providers (10). It is true that
aid from emerging economies gives an advantage to African governments
negotiating with international financial institutions: it allows them
to resist the political reforms required by the Washington Consensus
(11). But there is every indication that the newly restored borrowing
capacity of the HIPCs is a good deal for China, too. The danger is
that the "contract of the century" may push the DRC into the "renewed
debt of the century", and that it will once more be dependent on
creditors. Kinshasa knows this and is striving to provide guarantees
to the North. Last December, President Kabila said: "This renaissance
would not have been possible without the help of all your countries.
And we are infinitely grateful for this help, particularly for that of
the European Union, whose presence by our side played a decisive role,
coming at just the right moment" (12).

The debt inherited from Mobutu's dictatorship still threatens the DRC;
it had barely finished celebrating the cancellation of this debt by
the Paris Club when it had to face vulture funds demanding payments
totalling $452.5m. Their first target was SNEL. A South African
tribunal has authorised FG Hemisphere to confiscate the $105m that
SNEL hopes to make from selling electricity to South Africa over the
next 15 years. SNEL's motto - "Let the sun sleep, Inga is awake" - may
acquire a meaning that its creators had not foreseen.

/Translated by Charles Goulden/
*
*
*Tristan Coloma is a journalist*

(1) International Monetary Fund, Regional Economic Outlook: Sub-
Saharan Africa, Washington, April 2008.
(2) Vivien Foster and Cecilia Brice�o-Garmendia, eds, Africa's
Infrastructure: a Time for Transformation, Agence Fran�aise de
D�veloppement and The World Bank, Washington, 2010.
(3) Statistics in this paragraph are from Jean-Michel Severino and
Olivier Ray,/ Le Temps de l'Afrique/, Odile Jacob, Paris, 2010; The
World Bank, Africa's Infrastructure: a Time for Transformation, op
cit, and Africa Infrastructure Country Diagnostic - Underpowered: the
State of the Power Sector in sub-Saharan Africa, June 2008; and
International Monetary Fund, Regional Economic Outlook: sub-Saharan
Africa, op cit.
(4) See "Tap that water",/ The Economist/, London, 6 May 2010.
(5) The US State Department puts the DRC in 5th place in its ranking
of failed states. The Fund for Peace, The Failed States Index 2010,/
Foreign Policy/.
(6) The 2011 national budget is only around $7bn.
(7) The chief executive of SNEL, Daniel Yengo, is suspected of having
misappropriated $10m in Katanga.
(8) According to the energy ministry, international financial
institutions lent $1.5bn to the DRC between 2008 and 2010.
(9) As of 2006, more than 75% of sub-Saharan African countries had
seen some private-sector participation in electric power, and 66% had
privatised their state-owned utilities. See International Monetary
Fund, Regional Economic Outlook: sub-Saharan Africa, op cit.
(10) See Colette Braeckman, "Democratic Republic of Congo: the sale of
the century",/ Le Monde diplomatique/, English edition, September 2009.
(11) A series of standard reform measures applied by international
financial institutions to economies experiencing difficulties with
their debt.
(12)/ Jeune Afrique/, Paris, 3 December 2010.

/� Le Monde diplomatique/
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