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World Bank Group Supports DRC with Technical Assistance for Preparation of Inga 3 BC Hydropower Development

March 20, 2014

Project marks a stepping stone for transformational hydropower development

WASHINGTON, March 20, 2014 – The World Bank Group’s Board of Executive Directors today approved a US$73.1 million grant to the Democratic Republic of Congo (DRC) for the Inga 3 Basse Chute (BC) and Mid-size Hydropower Development Technical Assistance Project.

Today’s funding, together with US$33.4 million approved by the African Development Bank late last year, will provide world class expertise to support DRC to develop its large hydropower potential, estimated to be the third largest in the world after China and Russia.

The project will strengthen DRC’s institutional capability by establishing an autonomous and transparent Inga Development Authority, which will follow best international practice in selecting the private concessionaire and negotiating power purchase agreements.  The project will also finance technical, environmental, and social studies to develop the Inga 3 BC and selected mid-size hydropower projects sustainably.

Inga 3 BC is undoubtedly the most transformative project for Africa in the 21st century. It is one of the strategic pillars of development for the DRC, that needs energy to expand growth and reduce poverty in a sustainable way, said H.E. Matata Ponyo Mapon, Prime Minister of the Democratic Republic of Congo. "The World Bank Group’s involvement in this project reinforces its mission to fight poverty, and its ongoing commitment to help the Congolese government in its goal to move the country along the path to a strong development future.”

With the potential for 40,000MW, Inga is the world’s largest hydropower site. With an estimated generation cost of US$ 0.03/kWh, it also is one of the most affordable sources of energy in Africa. The Inga 3 BC development would divert about one sixth of the flow of the Congo River into the Bundi Valley. A dam on the Bundi River would create a 15.5 km2 reservoir.  Inga 3 BC does not include a dam on the Congo River itself.  A preliminary environmental and social assessment concluded that the Inga 3 BC development has a smaller footprint compared to hydropower projects of the same capacity. The land area to be flooded per megawatt (MW) of electricity generated will be among the smallest in the world.

One thousand MW of electricity produced by the Inga 3 BC development would be sold to the national utility SNEL, which in turn would sell it to households and small businesses in greater Kinshasa. The increase in power generation corresponds to the projected unmet demand growth in Kinshasa by 2025. This significant additional energy access for households and small businesses could only be financed and developed by combining it with electricity sales to credit-worthy business and other regional users.

It is proposed that 1,300 MW of power would be sold to mining companies in DRC's Katanga Province and an additional 2,500 MW would be sold to South Africa.  At the same time, the mid-size hydropower projects would help to increase energy access for people living in the rest of DRC.

“By being involved in the development of Inga 3 BC from an early stage we can help ensure that its development is done right so it can be a game changer by providing electricity to millions of people and powering commerce and industry, ” said Makhtar Diop, World Bank Vice President for Africa. “Supporting transformative projects that expand people's access to electricity is central to achieving the World Bank Group's twin goals of helping to end extreme poverty and boosting shared prosperity.”

The TA project does not include any construction or operational activities and no decision has been taken on whether the World Bank Group will support the eventual construction of Inga 3 BC. The TA project will finance a number of environmental and social assessments to shape the development of Inga 3 BC, including a cumulative impact assessment.

The IDA TA project will form the foundation of a unified World Bank Group approach to support a government-led process for the transparent development of Inga 3 BC. The team working on the support will draw on the expertise with large infrastructure projects from across the World Bank Group.

“Today’s decision on IDA support for the technical assistance project is an important stepping stone to develop Inga 3 BC and mid-size hydropower in DRC,” said Bernard Sheahan, Director, Infrastructure and Natural Resources at the International Finance Corporation. “The level of investment for Inga 3 BC is so high that neither the public sector nor the private sector alone could finance the full cost of development of the project. We look forward to working with our colleagues in the World Bank to help the Government of DRC attract private financing to responsibly develop Inga 3 BC”

Today’s grant funding of US$73.1 million is provided by the International Development Association* (IDA).

The technical assistance project combines US$33.4 million in financing from the African Development Bank, with the latest grant from the World Bank Group, for a total of US$106.5 million.

* The World Bank’s International Development Association (IDA), established in 1960, helps the world’s poorest countries by providing loans (called “credits”) and grants for projects and programs that boost economic growth, reduce poverty, and improve poor people’s lives. IDA is one of the largest sources of assistance for the world’s 82 poorest countries, 40 of which are in Africa. Resources from IDA bring positive change for 2.5 billion people living on less than $2 a day. Since 1960, IDA has supported development work in 108 countries. Annual commitments have increased steadily and averaged about $15 billion over the last three years, with about 50 percent of commitments going to Africa.

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PRESS RELEASE NO:
2014/382/AFR