THE BLOG
02/11/2014 01:49 pm ET | Updated Apr 13, 2014

World Bank Hands Africa's Biggest Dam Project Over to the Private Sector

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The Inga 3 Dam on the Congo River, which has incited the dreams of dam builders and investors for three decades, was finally scheduled to receive its first grant from the World Bank on February 10. Last week the Bank added another twist to the Inga saga and withdrew the project from its board calendar. Working with a Chinese company, the Bank now plans to develop the dam as a private investment through the International Finance Corporation (IFC), rather than as a public project. This is bad news for poor people and the environment in the Democratic Republic of Congo.

With a capacity of 4,800 megawatts and a price tag of $12 billion, Inga 3 is the World Bank's biggest ever hydropower project. The IFC has no expertise in developing such complex projects. The biggest hydropower project it has ever managed is the 600 megawatt Upper Marsyangdi 2 Dam in Nepal. Because wind and solar projects are becoming ever more attractive, the IFC's support for hydropower projects has shrunk from $300 million to a mere $50 million per year since 2008.

The IFC has a poor social and environmental track record. Only in recent months, the Corporation was admonished by its own ombudsperson for human rights violations and other abuses in the Tata Mundra thermal power plant in India and the Dinant oil palm project in Honduras. The Upper Marsyangdi 2 Project was rocked by strikes as well. International Rivers had documented that the planned Environmental Impact Assessment for Inga 3 falls short of good international practice. We can expect further environmental short-cuts and compromises if the project is developed by IFC and private investors.

The mining sector and other heavy industries consume 85 percent of all the power generated in the DRC. Less than 10 percent of the country's population has access to electricity. Increasing access is the highest development priority for the DRC's energy sector. Yet this is of no interest to private investors. A World Bank evaluation of the power sector found in 2003: "In most countries, the rural poor tend to be overlooked because private operators are reluctant to serve low-income clients given that these markets are not financially viable on a freestanding basis."

Similarly, Ali Mbuyi Tshimpanga, the director of the existing Inga hydropower station, warns: "The problem is that, with a public-private partnership, you patch up only the part of the grid that interests the private financiers. It's of almost no benefit to the community." The Inga 3 Dam is designed to serve mining companies and the South African market. If it is developed as a private investment, poor consumers are bound to be excluded from its benefits.

As International Rivers has learned from internal sources, the IFC deal was arranged by the heads of the World Bank, IFC and USAID behind the scenes, without any accountability to the DRC parliament, the World Bank's board of directors and civil society. Such elitist, non-democratic approaches will not bring about broad-based development in the DRC. Non-transparent deals like Inga 3 are the best recipe to entrench corruption in the country further.

Public support for a privatized Inga 3 Project becomes ever more indefensible. International Rivers will continue to oppose destructive mega-dams in the DRC and other countries, and will promote clean local energy solutions that are more effective at reducing poverty and protecting the environment.