Worry over SA billions in DRC Inga project

Give Congolese benefit of doubt, says minister

There are concerns about investing billions in taxpayers' money in a joint infrastructure project between South Africa and the Democratic Republic of Congo (DRC), one of the world's most corrupt countries.

Last month, Finance Minister Pravin Gordhan set aside R200-billion for the 40000MW Grand Inga hydroelectric project, set to be built at the Inga Falls on the Congo River, about 300km from Kinshasa.

Earlier this month, the two governments finalised a draft treaty on the project.

The World Bank "tentatively" estimates the cost of the first phase of the project - the 4800MW Inga 3 - at $40-million to $45-million.

Some observers say this is a lot of money to entrust to a country with a less than shining reputation.

Transparency International's latest corruption perception index ranked the DRC 160 on a list of 176 countries. It scored 21 on an index in which a score of 100 indicates the least corrupt countries and 0 indicates the most corrupt.

In 2011, after a feasibility study on Inga 3 began, African democracy watchdog Idasa called for care to be exercised in funding the project.

"The various foreign investors plying the project with funding could reduce it to a minefield of corruption in a state infamous for state and political manipulation of contracts and tenders," said Charlotte Johnson, then a researcher with Idasa.

But Energy Minister Dipuo Peters said in an interview with Business Times that she believed the DRC government should be given a chance to prove itself as the project had so many potential benefits for South Africa and the continent, and the DRC had been transparent with her team thus far.

"People must be given the benefit of the doubt," she said. "If we worked in a transparent manner, we will continue to work in a transparent manner. We must allow ... it is very painful seeing people without electricity."

Peters said the project would be implemented in accordance with the rules and regulations of the DRC, which she believed would minimise the risk and perception of corruption.

Perhaps providing a further measure of comfort that the project will not degenerate into a corrupt free-for-all is the involvement of the World Bank, which provides finance for capital projects in developing countries.

A spokesman for the bank said that it planned to support the Inga 3 development in collaboration with other development partners such as the African Development Bank. It is helping rehabilitate the Inga 1 and 2 plants, built during Mobutu Sese Seko's dictatorship and which fell into disrepair during the civil war after his ousting.

"As is customary for all World Bank-financed projects, all project documentation is placed in the public domain and is accessible online," said the spokesman.

"The World Bank has a zero- tolerance policy on corruption, and we have some of the toughest fiduciary standards of any development agency, including a 24/7 fraud and corruption hotline with appropriate whistle-blower protection."

Peters, who is spearheading South Africa's involvement in the project, said the potential benefits were immense. The World Bank estimated Inga 3's export potential to South Africa at 2500MW.

The government's integrated resources plan, signed and published by Peters in the Government Gazette in May 2011, envisaged 6%, or 2600MW, of the country's electricity coming from hydro sources by 2030. Inga 3 is expected to be commissioned in about 2020.

"We can buy [the power] in bulk, making it affordable," said Peters.

Once complete, Grand Inga will generate almost double the power coming from the Three Gorges Dam in China, which now holds bragging rights as the world's largest hydropower complex with 22500MW capacity.

This is only a fraction of the DRC's total hydropower resources, which the World Bank estimates at 100000MW.

"Those are the riches of the Democratic Republic of Congo," said Peters. "They can help extend the tentacles of energy access in Africa."

She said Grand Inga would satisfy the African Union's search for catalytic projects, as it had benefits for agriculture, mining and other sectors in the SADC region. Five other African countries outside the region will be connected to the grid.

World Bank estimates suggest the complex could supply energy to as many as 500million households across the continent.

In 2004, the national power utilities of Botswana, Namibia and Angola jumped at the opportunity to tap into these resources by forming the Westor Power Project, together with Eskom. But this fell by the wayside, with South Africa taking steps to fill the vacuum.

President Jacob Zuma tentatively locked down South Africa's involvement in the Grand Inga complex with the November 2011 signing of a memorandum of understanding with the DRC, in which it was agreed South Africa would be a potential customer.

Within six months of the memorandum, a draft Grand Inga treaty was drawn up, then approved by the cabinet.

On March 7, negotiation teams from both countries put the final touches to the draft treaty of joint cooperation.

"This is going to be so involved a project that we didn't want to rush," said Peters.

Other factors contributing to the length of time included the composition of the teams - with an average of two people from eight South African government departments - and overcoming the language barrier, with the DRC's official language being French.

Peters said the terms of the final draft treaty addressed how the project would be developed, the phases of the project, the governance processes to be followed, the responsibilities of each partner, the flow of the electricity, and how the electricity would be transmitted from the Inga site to South Africa.

Barring any unforeseen circumstances, this treaty will be presented to parliament next month as Peters's department is still busy preparing a cabinet memorandum. The Congolese team will follow the same process, after which the two countries will work on a final treaty.

"Working as the SADC, and working as Africans, we can keep the lights on cleanly. I'm so excited about this project," Peters said.