Investors take an interest in Africa’s dam building



Dam building has been part of a post-colonial dream to generate the energy African countries need to become industrialised states.

One of the largest planned is the Grand Inga in the Democratic Republic of Congo (DRC). If it ever comes to pass, the dam will be the largest in the world, twice the size of the Three Gorges Dam in China. It will be the world’s largest engineering project, and would turn the DRC into the battery of central Africa, powering economies thousands of kilometres away.

Getting it built, however, will not be easy. Current cost estimates are around US$100 billion, according to the World Bank. The global financial institution is backing the project but last year suspended its support following a dispute with the DRC government. It is not clear when or if the bank will resume funding for the project.

Another backer is South Africa, which says it will buy power from the Grand Inga dam that lies about 5,000km from its border. If built, Grand Inga will pump out 40,000 megawatts, equal to South Africa’s entire current energy output.

Elsewhere, dams are appearing all over the energy-starved continent, often with Chinese support. Beijing is putting money into hydro projects in Nigeria, Mozambique, Zimbabwe and Cameroon, among others. The Chinese firm Sinohydro has offices in more than a dozen African countries where it is either planning or building dams.

Private money is also taking an interest. The Wall Street buyout firm Blackstone helped to finance the Bujagali dam in Uganda, a purely financially motivated investment. Since it opened in 2012 the dam has provided a good return on equity to the extent that Blackstone has pledged at least $3bn for further African energy projects.

But dependency on hydro for electricity has its drawbacks. Drought is a regular feature of the African landscape and can drastically reduce the amount of water available to keep turbines turning. Countries such as Tanzania, Zimbabwe and Zambia have had to ration power as the rains stayed away over the past few years.

In addition, because droughts affects regions not just countries, neighbouring states dependent on hydro are unable to come to each others’ aid during drought.

Engineering can also be troublesome. The Kariba dam on the Zambezi River that divides Zimbabwe and Zambia, is in danger of collapse. The dam wall itself is about 600 metres long and 130 metres high, which is not particularly large. However, it holds back about 300km of lake water that is channelled through turbines that spews through night and day.

Kariba is vital to the energy grids of both countries but a design flaw has resulted in the plunging water digging out the earth at the base of the dam. Unchecked this will eventually undermine the foundations of the wall and cause it to collapse.

This could potentially destroy entire communities and kill tens of thousands of people downstream. The prospect is so alarming that an international effort is now underway to shore up the dam.

So while water is vital to life on the continent, mismanagement of the resource could prove fatal.

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Sector: E-commerce 

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