EIB examines financing for $760 million hydro project in DRC

A spokesperson for the European Investment Bank said that the bank is delaying decisions on financing the Ruzizi III hydroelectric plant, worth $760 million, in Central Africa due to the fighting between Rwandan-backed and Democratic Republic of Congo rebels.

After the January blitzkrieg of Congolese rebels, which saw them take over the strategic cities Goma and Bukavu and was condemned by African leaders as well as Western countries, Europe is increasing pressure on its adversaries.

The cities captured are located near Rwanda and Burundi which are also involved in the project. Both countries share a border with DRC along the Ruzizi River, which flows from Lake Kivu up to Lake Tanganyika.

Officials of the project said that when Rwandan-backed M23 rebels began their offensive, they were evaluating the planned 206 megawatt Ruzizi III ahead of its financial closure, which is expected to be later this year.

In response to questions, a spokesperson from the EIB (the lead arranger) said that the Ruzizi III site was within the conflict zone.

"We're waiting and seeing how the project will proceed... we're also closely coordinating with our cofinanciers".

Among the investors are the African Development Bank, the World Bank, the French Development Agency AFD and Germany's KfW.

A KfW representative said that the bank adhered with Germany's policy and referred to the statement of the federal ministry on March 4, which stated that new financial commitments had been suspended following a review the cooperation between the Rwandan Government.

A spokesperson for AFD said that the timeline of financial closure will depend on how things develop.

The World Bank stated that it is "actively engaging", all three countries as well as the regional body Energie des Grands Lacs, to help move quickly towards a financial resolution.

It has been planned for over a decade. The plant would be Africa's first public-private project to produce renewable energy using shared resources. Once completed, it would provide electricity for 30 million people.

Private sector partner TotalEnergies, via its SN Power unit, said it does not comment on funding of ongoing projects, while Nairobi-headquartered Industrial Promotion Services did not respond.

Already, there are two smaller dams. Another phase is being considered.

Officials estimated that Ruzizi III, which is expected to be operational by 2030, would double Burundi’s generation capacity, and increase Rwanda’s by a quarter. (Reporting and editing by Mark Potter.

(source: Reuters)