May 28 (Bloomberg) -- The Democratic Republic of Congo will be ready to build the 4,800 megawatt Inga III hydroelectric plant by 2015, after two failed attempts to kick-start the $12 billion project, Minister of Energy Bruno Kapandji said.
Support from the African Development Bank and World Bank, and the emergence of South Africa as a guaranteed purchaser of 2,500 megawatts of power will help the country find the at least $8.5 billion of financing it needs, Kapandji said in a May 24 interview in Kinshasa, the capital.
“We have to demystify Inga, we have to show it’s an ordinary project,” Kapandji said. “We could lay the first stone in October 2015.”
Inga III is the next step in the creation of a 40,000 megawatt Grand Inga complex, which would be the largest hydropower project in the world. Currently China’s Three Gorges hydroelectric complex is the biggest with a generating capacity of 22,500 megawatts, while Brazil’s Itaipu is the second largest at 14,000 megawatts. Inga lies on the Congo River, the world’s biggest by volume after the Amazon and the power project is expected to supply a number of neighboring countries.
A $5.2 billion plan to build Inga III by Western Power Corridor, a venture between five southern African countries, fell apart in 2010 “because of bad preparation,” Kapandji said. Two years later, BHP Billiton Ltd., the world’s biggest mining company, scrapped plans to finance the hydropower site when it decided not to build a proposed aluminum smelter in Congo.
The new Inga plan includes the creation of a catchment pool that will permit the construction of as many as six more plants, including Inga III, he said. The extra construction, along with the building of power lines to South Africa, explains the increase in cost, which could rise to $12 billion including inflation and financing fees, Kapandji said.
Congo will choose a developer from three groups of companies. The groups are made up of China Three Gorges Corp. and Sinohydro Corp.; Posco and Daewoo Corp. of South Korea in partnership with Canada’s SNC-Lavalin Group Inc.; and Actividades de Construccion y Servicios SA, based in Madrid, and Spain’s Eurofinsa Group which have submitted a third bid.
Congo is being advised by U.S. law firms Orrick, Herrington & Sutcliffe LLP, Lazard Ltd., Tractebel Energia SA of Brazil and GDF Suez of France, according to Kapandji.
The financing each group can raise will be a key determinant of the selection process, Kapandji said. Once a choice is made, the minister expects other companies to join the project to reduce the risk. Last month, Kapandji traveled to Washington to meet with companies and promote the project, he said.
Congo has about 2,400 megawatts of installed capacity, less than 3 percent of its hydropower potential, the World Bank said last year. Because of mismanagement, only about half of that energy is available, it said, and most of the population of 70 million has no electricity. South Africa, the continent’s biggest economy, has installed capacity of about 40,000 megawatts.
Some of Congo’s mining companies are using generators or purchasing power from Zambia to fuel their processing plants. Congo is the world’s eighth-largest producer of copper and the largest source of cobalt, which is used in rechargeable batteries. In the current Inga plan, 2,300 megawatts will go to mining companies in Congo.
The fees from South Africa and miners will help finance future energy projects for the population, Kapandji said. The United Nations ranked Congo the least developed country in the world this year, along with Niger.
South African President Jacob Zuma and Congo’s President Joseph Kabila are set to sign a treaty cementing their cooperation on Grand Inga sometime this year, Kapandji said.
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