An African banking group has announced that it will finance the development of a 200 MW hydropower plant along the Lufira River in the Democratic Republic of Congo (DRC). This project is the African Export-Import Bank’s (Afreximbank) first renewable energy initiative in the private sector in the DRC.
Project financed by Afreximbank and Kipay Investments
Afreximbank has partnered with Kipay Investments SAS (Kipay). Officials announced on December 18 that the bank will finance technical and bankability studies, legal fees, financial advisory, and fundraising for the hydropower development.
The groups stated that the energy project would bring significant benefits, including providing electricity to mining companies and enabling the valorization of essential minerals.
The economy of the DRC relies on cobalt mining. The country is the world’s largest producer of cobalt and is set to become one of the leading global lithium producers. It is also among the top five producers of industrial diamonds.
DRC : Largest hydropower potential on the continent
The DRC, the second-largest country in Africa by area, is considered to have the largest hydropower potential on the continent, although much of it remains untapped. The Congo River has the second-highest discharge and the second-largest drainage basin of any river in the world, behind the Amazon.
The country is home to the Grand Inga hydroelectric site on the Congo River, between Kinshasa and the Atlantic Ocean. The first hydroelectric plant, Inga 1, was built in 1978 with an installed capacity of 351 MW, while Inga 2, built in 1982, has an installed capacity of 1,424 MW. The World Bank Group stated last month that the two power plants are undergoing rehabilitation and currently operate at about 80% of their capacity. They still represent the majority of the electricity produced by SNEL, the national electricity company.
Several other hydroelectric installations are planned at Grand Inga, but financial obstacles are delaying their development.
Commitment to renewable energy
DRC officials, highlighting the project’s announcement, said that private investments would be necessary to further stimulate hydropower development. Kanayo Awani, Executive Vice President of Intra-African Trade and Export Development at Afreximbank, stated : “This signing ceremony underscores Afreximbank’s commitment to supporting renewable energy projects that drive industrialization activities and export development while promoting a just energy transition.”
Officials said the project is expected to reduce greenhouse gas emissions by about 108,000 metric tons of CO2 equivalent per year, helping the DRC achieve its climate goals under the Paris Agreement.
This financing reinforces Afreximbank’s commitment to mobilizing private capital to develop renewable energy projects and ensure a sustainable future for the DRC and the region. Eric Monga, CEO of Kipay, stated that the hydropower plant supports the socio-economic development of the region. “It is important that local communities reap the benefits of the project, including the creation of new jobs and capacity building for the future renewable energy sector in the DRC.”
The project will create 2,000 direct jobs and 952 potential indirect jobs while boosting fishing and other economic activities on the reservoir. It will also generate tax revenues for the DRC government over 30 years while promoting the creation of industrial hubs around the mining area.
