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World Bank set to approve financing for Congo's Inga dam

Source: Reuters - Fri, 14 Mar 2014 13:50 GMT
Author: Reuters
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* Huge Congo dam to get funding -World Bank official

* Postponed meeting now due in Washington on March 20

* Government has warned miners of electricity rationing

By Peter Jones

KINSHASA, March 14 (Reuters) - The World Bank is likely to approve $73 million next week to fund an expansion of the Inga hydroelectric dam in Democratic Republic of Congo, a bank official said on Friday.

The decision will be a relief to investors, particularly mining companies which have been threatened with electricity rationing due to a lack of power generation, but environmentalists say the impact of the project has not been properly evaluated.

The World Bank's administrative council had been due to meet on the matter in Washington on Feb. 10, but that was postponed to March 20, raising the prospect that the third phase of expansion of the Inga dam on the Congo, 250 km (156 miles) southwest of Kinshasa, would not be approved.

But World Bank country director in Congo, Eustache Ouayoro, told a news conference in Kinshasa: "We have had discussions with the (Bank) administrators which indicated to us that the project will be supported."

Only 9 percent of Congo's 65 million people have access to electricity and the mining sector on which its economy relies has been hamstrung by a lack of power.

In January, Prime Minister Augustin Matata Ponyo wrote a letter to President Joseph Kabila setting out plans to ration power to major international mining companies in the copper-rich Katanga province and demanding that miners halt any plans for expansion.

The suspension of new mining projects comes as Congo is achieving record high copper production: 942,000 tonnes in 2013, according to the International Monetary Fund.

Two existing hydropower stations on the Congo river - Inga I and II - are decades old and in disrepair, struggling to provide enough electricity to meet demand.

Inga III, once built, would provide 4,800 MW of energy - this would comfortably cover the 450 MW deficit mining companies in Katanga complain of.

Campaign group International Rivers has called on the World Bank to fund smaller, more local energy projects that it says would be less environmentally damaging and more effective.

"The proposed Inga 3 Dam fails to reduce energy poverty and protect the environment in the DRC," the group's policy director, Peter Bosshard, said.

The U.S. representative at the World Bank is likely to vote against the Inga project following recent legislation in Congress directing U.S. officials at international organizations to vote against big dams, but Ouayoro believes the financing will be approved anyway.

President Joseph Kabila's government has said it hopes to begin construction of Inga III by the end of 2015 but Ouayoro said this was ambitious and he expected work to begin by the end of 2016.

"This is a gigantic project with enormous risks," he said. "The earlier it starts the better, but 2015 will be difficult. We think the first turbine will be operational five years after the start of construction, but again it is a huge job." (Editing by Daniel Flynn and Robin Pomeroy)

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