The head of the International Finance Corp. has a lot on his agenda, but his top priority is financing the Grand Inga dam, an enormous hydropower scheme on the Congo River that would potentially double the output of electricity on the African continent.
“If there's one transaction in my tenure at IFC, if we can break ground on this, it would be fantastic,” Jin-Yong Cai said Wednesday in Washington at a discussion on the future of the IFC that was hosted by the Center for Strategic and International Studies. Cai described the Inga project as “the dream for Africa,” noting the continent’s huge power needs. At three cents per kilowatt hour, Grand Inga would generate the “most competitive clean power you can imagine,” Cai said, adding that “virtually nobody” lives in the area where the dam would be built.
Construction of Inga — and whether multilateral banks and bilateral donors should be involved in financing the project — is an issue that has divided policymakers, activists and Africa-watchers. As Devex previously reported, the issue got particularly heated in recent months after U.S. Agency for International Development Administrator Rajiv Shah and World Bank President Jim Kim both expressed their interest in supporting the project.
Cai told the audience Wednesday that between $80 and $100 billion in financing will be needed for the project to take off, and he has been in talks with U.S. energy companies about potential investment in the project.
Peter Woicke, a former CEO of IFC who gave introductory remarks, asked Cai how he could be so optimistic about the Inga dam, noting that he had tried to champion a much smaller dam project in Bujagali, Uganda, that was strongly opposed by NGOs and suffered from corruption.
Cai said that he thought there was enough common ground among stakeholders in the Inga project to move forward and, using language reminiscent of other World Bank officials’ comments on the project, he said: “When things are right, they should be done.”
While it took over a decade to get the Bujagali project approved, Cai seemed impatient to see the Inga scheme move forward.
“I’m coming from a country where we can do that (a dam like Bujagali) in two years or less,” Cai said, referring to his native China. “I’m not saying we’re going to copy that.”
A number of controversial cases in recent years have called into question how IFC manages social and environmental risks. Cai stressed that the financing institution tries to mitigate those concerns as it moves into riskier areas, but said he couldn’t guarantee there won’t be more controversies.
“Unless we try, the alternative is not much better,” he said.
Should Grand Inga be built — and should the International Finance Corp. and other investors support it? Let us know by leaving a comment below.
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