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AfDB president calls for political will to kick-start Inga 3 project

19th April 2024

     

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Development finance institution African Development Bank (AfDB) group president Dr Akinwumi Adesina has called for a major political commitment to kick-start construction work on the Democratic Republic of Congo’s (DRC’s) giant Inga 3 dam, which has the potential to meet the power needs of more than a dozen countries in Central and Southern Africa.

“We have been talking about Inga3 for many years . . . What we need is political coordination,” Adesina told members of the Development Bank of Southern Africa (DBSA) board – led by chairperson Ebrahim Rasool – during a recent meeting at the AfDB’s headquarters in Abidjan.

Recalling that South African President Cyril Ramaphosa had raised the issue at last year’s Paris Summit on a New Global Financing Pact, Adesina declared that the huge potential output from Inga3 could solve South Africa’s perennial energy shortage, which has badly affected the country’s economic performance.

“While South Africa is Africa’s largest industralised economy, it continues to face challenges in its energy sector, causing a drop in its industrial output, and contracting of the [gross domestic product] and job creation, and this is also having an impact on the region,” said Adesina.

During last June’s Paris Summit, Ramaphosa told global leaders: “To prove that these summits are not summits where we just talk, let us now put money on the table and collectively say we are going to address this megaproject which will generate electricity for up to 12 to 15 countries. This is a project that multilateral development banks working together can fund.”

The AfDB is already financing the Mphanda Nkuwa hydroelectric project in Mozambique, which is set to generate 1 500 MW for South Africa and help in overcoming “crippling electricity shortages” which have led to several hours of power cuts every day for the last few years.

Adesina added the AfDB will continue to work with DBSA, other development partners and the government of South Africa to tackle the country’s energy challenges including its transition from coal to clean energy.

Besides energy challenges, Adesina said there are other challenges facing South Africa, such as poverty in the townships and rural areas, as well as unemployment among young people, that need urgent attention.

The bank and DBSA, already working together on several projects, expressed readiness to deepen the relationship by investing in transport corridors, such as Mozambique’s Nacala corridor which links Zambia, Malawi and Mozambique, and the Lobito corridor linking Zambia to Angola and the DRC.

Adesina and Rasool said their institutions should devise local financing solutions for infrastructure transactions to avoid depreciating currencies in many countries resulting in increasing borrowing costs on dollar-based loans.

Award-winning Projects

Meanwhile, two AfDB-supported projects have won awards at the IJ global awards held in London, in the UK.

The Singrobo hydropower plant in Côte d'Ivoire in which the bank played the mandated lead arranger (MLA) role won the ‘Power Deal of the Year’ award, while the Kom Ombo Solar plant, financed by the bank as Co-MLA won the ‘Energy Transition Deal of the Year’ award.

The Singrobo hydropower plant was the first hydropower independent power producer, and private sector-funded climate action investment, to reach financial close in West Africa in December 2022. The bank financed €40-million out of the total cost of €174.3-million.

Currently under construction, the project comprises the design, development, operation and transfer of a 44 MW hydroelectric plant on the Bandama river, and a 3.5-km transmission line and substation to evacuate power.

A long-term power purchase agreement will see all the energy produced by the Singrobo plant sold to Compagnie Ivoirienne d’Electricite, the operator of Cote d’Ivoire’s national grid. Upon completion, the plant will contribute to Côte d’Ivoire’s goal of generating 42% of its electricity from renewable sources by 2030.

The Kom Ombo solar photovoltaic (PV) plant comprising the design, construction and operation of a greenfield 200 MW solar PV plant in Egypt, reached financial close in 2023. The bank provided a $27.22-million senior loan.

The project complements other AfDB energy operations in Egypt, including the Benban solar park, and Egypt’s 150 MW in feed-in-tarriff projects. Successful implementation of the project will increase Egypt’s installed power generation capacity from renewable sources, and further diversify the energy mix in line with the country’s energy transition strategy, and the bank’s green growth agenda.

Commenting on the awards, AfDB energy financial solutions, policy and regulation director Wale Shonibare said: “These awards are a recognition of our continued efforts to deliver green, affordable, quality energy access to Africa, in line with the bank’s energy and green growth agenda. We are encouraged to continue mobilising private-sector finance and delivering innovative financial solutions that facilitate just energy transitions and address the unique financing needs of our regional member countries.”

Edited by Nadine James
Features Deputy Editor

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