Congo’s $9 Billion Inga Plant May Sell S. Africa Power
The government will host a meeting next month to discuss three bids from companies including Sinohydro Corp. (601669) of China and Posco (005490) of Korea to build the 4,000-megawatt facility, said Vika di Panzu, a member of Congo’s Inga III Steering Committee. The plant will take six years to build and cost more than $9 billion, he said in an interview yesterday at the iPAD mining and infrastructure conference in Congo’s capital, Kinshasa.
The Central African nation may finance the project with help from multilateral donors including the World Bank and the African Development Bank, and power-purchasing agreements from metal companies, with construction beginning by 2016, di Panzu said. Two previous plans to finance Inga III failed in the past decade, delaying its construction, he said.
BHP Billiton Ltd. (BIL), the world’s biggest mining company, in February abandoned a plan to build an aluminum smelter in Congo to be powered by the plant. The BHP deal supplanted an earlier plan with Western Power Corridor, a venture involving five southern African countries, to build a plant that was intended to fill a regional energy shortfall. South Africa had power outages in 2008 that shut most of its mines and smelters.
Congo will begin considering final feasibility studies from three groups of companies next month, di Panzu said, including one from China Three Gorges Corp. and Sinohydro. Two Korean companies, Posco and Daewoo Corp. have partnered with Canada’s SNC-Lavalin Group Inc. (SNC) for a second bid. Actividades de Construccion y Servicios SA, based in Madrid, and Spain’s Eurofinsa Group have submitted a third bid.
Construction of the plant will cost $6 billion, di Panzu said, while the power lines stretching from Inga to Kolwezi in Congo’s southeastern Katanga province and on to Witkop, South Africa, about 3,600 kilometers (2,237 miles) away, will cost more than $3 billion. Mining companies in Katanga will receive 1,500 megawatts of power from the deal, he said.
Congo and South Africa are also discussing a treaty for the implementation of a plan to build the world’s largest hydropower plant, the 40,000 megawatt Grand Inga complex, after the two countries signed a memorandum of understanding last November. Congo’s parliament is considering a bill to liberalize the electricity industry in the country, di Panzu said.
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