World bank suspends funding for Inga 3 Dam in the Congo

The World Bank Group has suspended disbursements of funding to the Inga-3 Basse Chute (BC) & Mid-Size Hydropower Development Technical Assistance (TA) Project in the Democratic Republic of Congo (DRC).

This follows the Government of DRC’s decision to take the project in a different strategic direction to that agreed between the World Bank and the Government in 2014.

Africa Director of International Rivers Rudo Sanyanga says: “We applaud the World Bank’s decision to suspend Inga 3, a project in which it shouldn’t have become involved in the first place. Inga 3 represents a failed development model which bypasses the poor for the benefit of extractive industry and export markets.”

And Joshua Klemm, Policy Director of International Rivers, comments: “The World Bank’s withdrawal illustrates that Inga 3 violates basic environmental and procurement standards. Any other investors should think twice about getting involved in this white elephant.”

Chinese and Spanish consortia have each submitted bids for the contract to develop the Inga 3 scheme, with the winner to be announced in October.

The project’s biggest unknown is who will finance the $14 billion price tag. The African Development Bank, the European Investment Bank, and the French government have all expressed interest.

Yesterday’s embarrassing decision should serve as a wake-up call for the World Bank, which promotes mega-dams as a false solution to energy poverty and climate change.

With the dams it finances ending in huge delays and cost overruns all over the world, the World Bank may finally learn a hard-won lesson. Comments Peter Bosshard, International Rivers’ Interim Executive Director: “For the World Bank, this could spell the beginning of the end of its love affair with mega-dams.”

On March 20, 2014 the World Bank’s Board approved a US$73.1-million grant from its International Development Association (IDA) for the project, consisting of Inga-3 BC development support (US$47.5 million) and mid-size hydropower development support (US$25.6 million).

At the time of suspension, approximately 6% of total project financing had been disbursed.

The Inga component of the TA project aimed to finance a flexible suite of technical assistance, including strategic advice to the Government, complementary studies, capacity building, and institutional strengthening.

The IDA TA project aimed to support a government-led process for the transparent development of Inga-3 BC as a public private partnership.

The World Bank Group is in a continuing dialogue with the Government about the implementation arrangements of the project, with the goal of ensuring that it follows international good practice.

The World Bank Group remains committed to supporting the DRC in its efforts to provide affordable and reliable energy for its people and to drive sustainable sources of growth for its economy.

Beyond the Inga project, the Bank Group will remain engaged in the electricity sector in DRC by focusing on improving the performance of the State Utility SNEL, rehabilitating mid-size hydropower plants, increasing energy access, and continuing support to regional transmission interconnections.