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DRC: World Bank approves Development of Regional and Domestic Power Markets

The World Bank Board of Executive Directors today approved a grant of US$296.7 million to increase the availability and reliability of low cost and environmentally-friendly electric energy in DRC and elsewhere in southern and central Africa thanks to the rehabilitation of the Inga 1 and 2 power plants in DR Congo, the construction of a second transmission line to the capital Kinshasa and the rehabilitation and extension of the distribution network in Kinshasa.
DR Congo has enormous hydropower potential, estimated at about 100,000 MW or 13 percent of global hydropower potential. Much of this potential is located at the INGA site on the Congo River, located 125 miles (200km) downriver from Kinshasa with a potential capacity estimated at about 45,000 MW.Today, the INGA site provides power both southward – notably to utilities within the Southern African Power Pool (SAAP) - and northward to the Central African Power Pool (CAPP).Despite the potential, only 6.5 percent of households in DR Congo have access to electricity, compared to an average of 20 percent access for households across sub-Saharan Africa.

DRC's generation and other power facilities have not been systematically maintained, overhauled or updated. As a result, the Inga 1 and 2 facilities operate at 40 percent of installed capacity. At the same time, the demand for power -- both national and regional -- has grown.

The project approved Tuesday by the World Bank Board will help improve operational efficiency in the electricity sector in DR Congo and expand generation, transmission and distribution capacity. It will better serve domestic power demand and demand for exports.

It will increase the capacity of DR Congo to meet domestic demand and to export power to the electricity utilities of 12 countries in southern Africa grouped under the SAPP as well as electricity utilities of ten countries grouped under the CAPP.

The project will notably increase access of consumers to cheaper and more reliable power, including to over 350,000 additional people (new connections) in Kinshasa, in addition to improving energy services to more than 1.5 million people currently with access to power in Kinshasa.

Medium-term to long-term investment plans on the INGA site – not funded through this operation – envisage the future development of a new hydropower facility with estimated capacities ranging from 3,500 MW to well above 20,000 MW.

The first component of the project approved by the World Bank Board on Tuesday – focusing on power generation – requires a total of US$226.7 million in funding (not all of which is provided by the Bank) for the rehabilitation of hydroelectric facilities at INGA. The rehabilitation will involve civil works on the intake canal to improve the water flow through the plant and the rehabilitation of turbines and other facilities that would expand operational capacity of the INGA plants (1 and 2) from their current level of about 700 MW to about 1,300 MW of reliable production.

A second component focused on transmission and expected to cost a total of US$93.8 million (to be provided through cofinancing) will involve the construction of a 400 KV transmission line from INGA to Kinshasa, complementing the existing 220 KV INGA/Kinshasa transmission line.

A total of US$88.5 million in funding (which, it is anticipated, will be cofinanced with the African Development Bank) is needed for implementation of the project's third component which focuses on expanding and strengthening the distribution system in Kinshasa, including the acquisition of low voltage cables and transformers, and the extension of the grid into currently un-electrified areas of Kinshasa and the connection in these areas of 50,000 new customers.

The fourth and fifth components of the project – demanding a total of US$90 million – will focus on support to project implementation and the strengthening of the capacity of SNEL (the national power utility), in billing/collection activities, in planning and maintenance; and in building capacities within the Ministry of Energy to regulate and oversee the smooth functioning of the sector. In addition to billing/collection activities, SNEL and the Government of DR Congo will undertake through this project various actions designed to enhance governance in the electricity sector, including the publication of audits and contracts.

The Regional and Domestic Power Markets Development Project, which supports the Southern African Power Market Program, is based on the wisdom articulated by African leaders in NEPAD that the efficient use of energy resources offered by large scale power generation schemes such as INGA is best framed on the basis of the needs provided by multi-country markets.

Additional information:
News date: 29/05/2007

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