By the Blouin News Business staff

What’s at stake at the world’s potential largest hydroelectric dam?

by in Africa.

The Three Gorges Dam in operation in Yichang, central China's Hubei province. Photo: AFP/Getty Images

The world’s largest hydroelectric dam, the Three Gorges in China, sees its status threatened by Grand Inga in the DRC. Photo: AFP/Getty Images

The Grand Inga megaproject in the Democratic Republic of Congo (DRC) has long been envisioned as the world’s largest hydroelectric dam; one that could transform Africa’s electrical power supply and tackle one of the continent’s most pressing shortages. At 40,000 megawatts (MW), it would generate almost double the output of the Three Gorges dam (22,500 MW) on the Yangtze river in China, currently the world’s largest hydroelectric scheme. Grand Inga would produce more than a third of the total power generated across Africa today. The World Bank has estimated that it could supply electricity to 500 million households in Africa.

The series of dams would be located at the Inga Falls, part of the Livingstone Falls. One of the largest in the world, they sit 50 km upstream of the mouth of the Congo River, though are rapids more than falls. An $80 billion price tag to harness their potential hydropower is only one reason that construction has yet to start. The political, economic, environmental and social implications are heavier impediments. Congo’s idiosyncrasies bolster those. A country known for political volatility, it is currently trying to end an 18-month-old uprising launched by the M23 rebel group. Though rich in natural resources, notably gold, diamonds and tin, the country lacks credible institutions and  corruption is widespread.

Arranging finance for such a megaproject in Africa’s poorest nation is proving to be difficult for the government of President Joseph Kabila. Multilateral organizations, other countries and international investors want in, but beyond the financial risks, the reputational risks are high, too. The project would adversely effect local communities and the environment.

In May, DRC and international officials agreed that construction would commence in October 2015. At the same time, South Africa signed a “cooperation treaty” for joint development of  the Inga III dam (there are already two small and inefficient dams on the falls that were built 30 and 40 years ago respectively). Inga III would be the first of six phases that comprise the larger Grand Inga project and is estimated to cost up to $12 billion, generating 4,800 MW. Under the DRC-South Africa agreement more than half of that energy (2,500 MW) would be sent to Pretoria. Construction, whenever it does start, is expected to take at least six years.

Grand Inga is intended to be developed as a public-private partnership, but the question of who will finance it remains. The World Bank, its private-sector lending arm, the IFC, and the African Development Bank (AfDB) still have to approve a $63 million technical assistance package for the project. The European Investment Bank is also among the array of multilateral organizations that have prepared studies and technical plans for the megaproject.

Meantime, the DRC government has opened a bidding process to select the private-sector lead contractor for Inga III. A number of consortia are in the running: Sinohydro (the world’s largest dam builder) and the Three Gorges Corporation from China; Actividades de Construcion y Servicios (ACS), Eurofinsa and AEE from Spain; and the Daewoo-Posco-SNC Lavalin consortium from South Korea and Canada.

Detractors of Grand Inga point to Inga I and Inga II, which together generate 1,800 MW, as prelude to what could happen with Inga III. Dams I and II have never operated efficiently for lack of maintenance and because of mismanagement. Nearly all the energy they produce bypasses the DRC’s rural communities and is consumed by the mining industry.

Villagers that live near the Inga falls would need to be relocated for the construction of Inga III. “Families that were displaced by the Inga I and Inga II were never fully compensated and to this day they live in squalor without basic services such as adequate water and sanitation,” Rudo Sanyanga, the Africa Program Director for the riparian environmental watchdog group International Rivers, told Blouin News. Sanyanga also warns of potential environmental damage to aquatic ecosystems from the dams as well as from deforestation stemming from the need to clear forest for transmission lines.

She believes that “very little of the electricity generated by Grand Inga will provide for city or village level power to Congolese people. It will instead be transported to other markets in Africa and Europe.” That echoes a widespread concern that the megaproject will primarily benefit large industrial users and the urban affluent, but that it will not improve electricity supplies to Africa’s rural and urban poor. “Some African governments, rather than the nations, desire the construction,” Sanyanga says.

Once built, Inga III would be a potential cornerstone of the construction of a long-dreamed of power grid across Africa that could drive the continent’s industrial economic development. With such a large energy infrastructure deficit, African nations are trapped between their inability to broaden their economies beyond the export of raw commodities and their inability to power industrialization and urban development.

The risks of such a mega project not succeeding are as big as the continent’s need for energy. China’s Three Gorges dam holds some instructive lessons. That megaproject has provided much needed power but also led to 13 cities, 140 towns and 1,350 villages being submerged and 1.4 million people relocated. Its environmental impact remains highly controversial. The final bill, some analysts reckon, was more than double the initial estimate. A big infrastructure project doesn’t necessarily mean a big development step.