Fortescue Metals Group chairman Andrew Forrest has secured the inside running on developing the world’s largest hydro power project – which alone carries a $US80 billion ($103.8 billion) price tag – and associated port, green hydrogen and green ammonia capability in the troubled Democratic Republic of Congo.
Dr Forrest said Fortescue’s green energy and green hydrogen projects in Africa were not confined to the DRC and included projects in Kenya and Ethiopia, with investors and financiers already indicating a willingness to commit more than $US100 billion.
He put Fortescue’s weight behind the Grand Inga dam project on the Congo on Sunday as part of his ambition to diversify the iron ore miner into a global force in green energy and green hydrogen.
Australia’s richest man outlined details of the Grand Inga development deal with DRC president Felix Tshisekedi in Goma, a city near the Rwanda border and scene of a deadly volcanic eruption last month.
Under their agreement, which is dependent on final discussions, Fortescue subsidiary Fortescue Future Industries was granted exclusive rights to develop the long-talked about Grand Inga project, including the Matadi and the Pioka projects.
The development is slated to include the construction of a related port precinct in addition to green hydrogen and green ammonia production capability.
Mr Tshisekedi said all foreign governments as well as service and construction providers should now deal with Fortescue in regard to Grand Inga, and that he had put his faith in the company’s track record of delivering on major infrastructure projects in mining.
Dr Forrest said Fortescue had secured the Grand Inga suite of projects plus others in Kenya and Ethiopia.
“We have a number of parties highly interested in supporting our projects and Fortescue will invest on behalf of itself and its supporters over $US100 billion developing the top hydro, solar and geothermal sites in Africa,” he said.
“Fortescue will take each project through to bankable feasibility approval where there are an array of international investors and lenders willing to participate in the green energy revolution.”
Dr Forrest said the Fortescue projects had the potential to generate more than 100 gigawatts of green electricity primarily for the production of green hydrogen in Africa for European markets.
“We have firm interest for at least that amount in Europe,” he said.
The Grand Inga project has been hailed by some as the holy grail in hydro power, with potential to produce 42,000 megawatts (MW) of electricity based on an $US80 billion expansion of the existing 351MW Inga 1 and 1424MW Inga 2 plants.
If fully developed it would generate more electricity than the world’s two biggest hydro power plants, Three Gorges in China and Itaipu in South America, combined.
The DRC has been looking for investors to begin building the next stage, 4800WM Inga 3, with five other stages planned in a project dogged by environment and social concerns about large dams on the Congo, and the spectre of political uncertainty and third-party interference in the DRC.
Goma was the scene of mass evacuation in May after the eruption of the Nyiragongo volcano and subsequent warnings from scientists that the city was in danger of deadly gas emissions. AP
Another stumbling block has been the size of the cross-Africa transmission network needed to justify the investment.
The addition of transportable green hydrogen and green ammonium would overcome that hurdle and open up global markets.
The project would involve building a dam across the south of the Bundi River valley where it meets the Congo, then diverting the Congo from above the Inga waterfalls into the north of the valley to create a huge reservoir.
The World Bank cancelled its support for Inga 3 in 2016 after a falling out with the DRC on the direction of the project that has been for decades touted as having the potential to supply green electricity to most of Africa.
The World Bank, the European Investment Bank and the African Development Bank have all in the past provided funding for feasibility and environmental studies.
Mr Tshisekedi spoke at US-organised Leaders Summit on Climate in April and urged those in positions of power in developed nations to deliver the financial resources needed to make the transition to green energy.
Republic of Congo’s President Felix Tshisekedi.
“This should be substantial,” he said. “This also requires simplifying the procedures for accessing financing for the least developed countries, the majority of which are in Africa.”
China casts a huge shadow over the DRC where it controls at least 70 per cent of the cobalt and copper-rich mining industry.
Dr Forrest and wife Nicola travelled to Goma on Saturday via the capital Kinshasa after entering the DRC from Cameroon.
They spent the night in Goma, the scene of mass evacuation in May after the eruption of the Nyiragongo volcano and subsequent warnings from scientists that the city was in danger of deadly gas emissions as underground magma flowed toward Lake Kivu, before a press conference with Mr Tshisekedi on Sunday.
The deal builds on talks between Dr Forrest and Mr Tshisekedi last September when they signed a deed of agreement for Fortescue to study the feasibility of projects “using DRC hydropower and geothermal resources to support green industrial operations”.
“Subject to the completion of feasibility studies and approvals, individual projects will be developed by FFI with ownership and project finance sources to be separately secured without recourse to Fortescue,” the company said at the time.
Fortescue has said in the past that it intends to fund its green energy ambitions off balance sheet and analysts have suggested that it should be able to find willing financial backers.
The last DRC visit was part of a trip where Dr Forrest and a Fortescue team visited 47 countries in a four-month hunt for green energy projects.
The Fortescue team narrowly avoiding a deadly bomb blast targeting Afghanistan Vice-President Amrullah Saleh in Kabul during their travels.
Dr Forrest, who turns 60 next month, left Perth in April on his latest green energy-green hydrogen quest for assets, investors and customers, and has again visited a host of countries.
Fortescue, on the back of the first global search last year, committed 10 per cent of future profits towards FFI projects, a pledge in its own right that could pump more than $1 billion a year into clean energy ventures.
The $70.3 billion company has set a goal of operational carbon neutrality by 2030 that involves becoming a producer of green hydrogen and developing green steel pilot plant in WA alongside its iron ore operations.
The Grand Inga deal includes commitments from the DRC around gender equality in education and eradicating modern slavery and forced marriage.
Dr Forrest said any foreign entity or company that worked with Fortescue in Africa would have to commit to training local workers so that they built the infrastructure and power projects.
In Financial Review