Dam doubts

DRC’s giant Inga III dam: Spanish firm ACS throws in the towel

By Aurélie M’Bida, and Estelle Maussion

Posted on January 24, 2020 10:21

To match feature CONGO-DEMOCRATIC/POWER © A view of Inga dam’s eight massive turbines on the mighty Congo River October 22, 2006.  REUTERS/Marlene Rabaud
A view of Inga dam’s eight massive turbines on the mighty Congo River October 22, 2006. REUTERS/Marlene Rabaud

One partner has bailed on the giant Inga III dam. Will it help move things forward or is it a sign of bigger problems?

The decision comes at a time when the Chinese and European consortia have been unable to agree on the constitution of a joint consortium, required by the Congolese presidency, to carry out the project.

Rumble on the Congo River

Tensions between the consortium members, chosen by the Congolese government to develop the Inga III project, were revealed in a report published in October 2019 by the NGO Resource Matters and the Congo Study Group (CSG). Now, one of the partners in the project — worth an estimated $14bn — has thrown in the towel. The Spanish construction group ACS, which leads the European branch of the consortium via its subsidiary Cobra Instalaciones y Servicios, “will not participate in the execution of the project”, according to a report in Bloomberg on 20 January.

With a capacity of 11,000MW, the Inga III project is part of Grand Inga, a series of dams designed to exploit up to 40,000MW of electricity from the Congo River. If successful, Inga III will become the largest hydropower plant in sub-Saharan Africa. Its development was entrusted by the Congolese government, in October 2018, to two China Inga III groups, led by China Three Gorges Corporation and ProInga, which, in addition to ACS, includes the German turbine manufacturer, Andritz, and the Spanish energy specialist, AEE Power.

Africa not strategic for ACS

Contacted by Jeune Afrique, the Spanish group, listed on the stock exchange (IBEX 35), confirmed its exit from the Inga III project, without, however, providing reasons for the decision.

A source close to the European consortium said: “It is a strategic and sovereign decision of ACS which does not consider major civil engineering works as strategic in Africa. The group prefers to focus on other geographical areas in the world,” and went on to state, “this is not a surprise for us or for many of the players in the case”.

The decision, however, highlights a degree of uncertainty within the European consortium regarding the tensions between the European and Chinese partners, particularly over the execution of the project, in one or two phases, and the distribution of shares within the final consortium. After the Spanish withdrawal, “negotiations to arrive at the formation of a single consortium could be smoothed over”, the source explained.

Unblocking the project?

The parties, who had appealed for DRC President Félix Tshisekedi and the African Development Bank (AfDB) to arbitrate at the end of last year, have not yet reached an agreement. Adding to the controversy, the DRC president has said he preferred a smaller 4,800MW plant. This plan was put forward in an earlier version and approved by AfDB president Akinwumi Adesina, as Jeune Afrique Business+ revealed last November in an exclusive interview with Adesina. The bank financed feasibility studies for the smaller dam in 2013.

While it is still too early to say who will replace ACS within the European consortium, we understand, discussions with African, European, and American companies are at a preliminary stage. As for the agreement between Europeans and Chinese on the joint consortium, “it could be reached in February,” according to our source.

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