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SA, DRC plan regional bilaterals in wake of Inga treaty

Energy Minister Dikobe Ben Martins

Energy Minister Dikobe Ben Martins

Photo by Duane Daws

8th November 2013

By: Terence Creamer

Creamer Media Editor

  

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Following the signing of the Grand Inga Hydropower Project Treaty the South African and Democratic Republic of Congo (DRC) governments are planning a series of engagements with other countries in Southern African to assess their role, or interest in participating in the project.

South Africa, through State-owned power utility Eskom, has committed to taking an initial 15% equity position in the first 4 800 MW phase of the project, as well as supporting efforts to secure funding for the scheme.

Critically, Eskom has also committed itself to a power purchase agreement for an initial 2 500 MW, with the 2 300 MW balance to flow to DRC. In addition, offtake commitments for a minimum of 30% of any future phases have also been agreed, with experts estimating that the mighty Congo river has hydropower potential of about 44 000 MW.

The South African Cabinet welcomed the treaty, saying the project would extend energy access to support agriculture, mining and manufacturing in Africa.

In addition, Energy Minister Dikobe Ben Martins tells Engineering News Online that there is a sense of optimism that the scheme, which has had a number of false starts in the past, is poised to move forward under the treaty framework.

He says higher levels of stability in the DRC, together with growing energy demand and support for crossborder projects, is offering a favourable backdrop for progress.

“South Africa’s initial commitment is to assist in sourcing the requisite funding and to participate through all the project phases,” he explains, adding that the country was targeting an eventual offtake of 11 000 MW.

Bilateral meetings have already been held with Angola and were being planned with transit countries, Zambia and Zimbabwe. Meetings would also be held with countries that may wish to tap add tributary lines off the main truck transmission network, such as Botswana, Namibia and a number of East African countries.

Given the scale of the project, as well as the transmission distances involved, the funding challenges are likely to prove significant, but Martins insists that the commitment to seeing the project through is higher than has hitherto been the case.

“There is a vibrant, positive mood where African countries want to do things for themselves . . . so there is a drive and commitment to see this realised, with African countries acting as the motive force in order to ensure the success of this particular programme.”

However, close energy-market observers believe it will still be some time before the project is realised, partly owing to the challenges associated with having multiple countries involved.

Another key consideration is the currency risk for a utility such as Eskom, which will have to deal with the likelihood of having to finance a dollar-based project and tariffs through rand-based revenues.

Edited by Creamer Media Reporter

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