New African dams to power mining

17 June 2008

The IMF’s April 2008 Regional Economic Outlook for Sub-Saharan Africa includes a whole chapter on Africa’s power supply crisis. But though the IMF does address access to electricity, the World Bank does not seem to be hearing that message. Two dam projects are being rushed to power the mining booms in Africa.

In May the World Bank’s private sector arm, the International Finance Corporation (IFC), started a feasibility study on the Kafue Gorge Lower project, which was originally proposed in the 1970s. The 750 megawatt dam, which will be the largest ever African public-private energy project, will require six years and $1 billion to build. The IFC is helping to finance the feasibility study and it is presumed they will be approached to finance dam contruction once the study is complete. A private electricity provider, whose main customers are copper mining companies, has already expressed interest in building the dam.

The World Bank and African Development Bank are considering funding the Rusumo Falls hydroelectric project in the Kagera Basin bordering Burundi, Rwanda and Tanzania. However the development benefits of the project, which will cost an estimated $190 million, are questionable. Washington-based NGO Bank Information Center explains that rather than bringing power to East Africans who are not connected to the national grid, this dam would provide its 60 megawatts of power to the western mining provinces of Tanzania and potentially help develop Burundi’s nickel mining industry. In addition there are serious questions surrounding the construction of a large dam in an area prone to drought, particularly with the onset of climate change. The project is facing delays over the determination of the exact site of the dam.