Botswana counts its losses as Westcor folds

MBONGENI MGUNI
Staff Writer | Friday March 5, 2010 00:00

In 2003, BPC invested US$100 000 in Western Power Corridor (Westcor), an ambitious P55 billion project known as INGA III to tap hydroelectric power from the Congo and Cuanza Rivers in the DRC and Angola respectively.

Botswana, along with the DRC, Angola, Namibia and South Africa, were to benefit from an anticipated 3 500 MW produced by the project.

Under two sets of agreement between these countries' lead utilities, each state contributed US$100 000 towards the establishment and operationalisation of Westcor's office and its preliminary studies and processes. The office has been established in Gaborone.

This week, the mammoth project was thrown into disarray after energy ministers of Westcor member states decided to pull the plug on the initiative, citing the position taken by the DRC on INGA III.

The DRC withdrew INGA III from Westcor's plans, preferring to award the area to BHP Billiton which pitched a proposal to build a P24-billion 2 500 MW station on the same site. The energy ministers' meeting, held in Angola, decided that Westcor could not proceed without INGA III contribution.

'The forum discussed DRC's proposals for the development of the project, including the withdrawal from the INGA III dam of the Westcor project as stipulated in its establishment documents,' a press release from the Angolan Energy Ministry said. 

The ministers decided Westcor could not continue without INGA III and decided to terminate the project and shut the Gaborone office until June.In the interim, the member states will explore alternative schemes for power within their territories, using their 2004 agreements as a basis.

Besides the P688,000 Botswana has lost, the country may find itself pumping out more funds after June to finance processes required to wind up Westcor. Speaking to Business Week, BPC Chief Executive Officer, Jacob Raleru, said the issue of recovering the investment in Westcor was irrelevant as the funds had been spent on the establishment of the Gaborone office and other preliminary work. 'You have to remember that the money was for various activities,' Raleru said. 'These, such as the studies and the establishment and funding of the office, have been taking place.

'All the time the project was sitting idle, there was an office established, people employed, studies and marketing initiatives undertaken, and so on.'Since its establishment, the office has spearheaded a successful pre-feasibility study and initiated other technical, legal and financial processes. Raleru said the heads of utilities involved had planned to meet shortly after the energy ministers meeting late February and discuss the developments around Westcor. He still hoped the meeting would take place soon.

'Until we meet and digest the contents of the ministers' meeting, we cannot have a response to what has been reported in the media,' he said.  'Once we meet as utilities, that is when we will look at the way forward.' The BPC CEO emphasised that no official communication had come from the governments involved on reports that Westcor has folded or the way forward.'We cannot take reports from the media,' Releru said. 'Communication should come from the ministers and not the media. The minister (Kedikilwe) has not received any communication that he has shared with us to say we don't have a project any more. Ministry of Minerals, Energy and Water Resources officials referred enquiries back to the BPC, Botswana's lead agency in the Westcor project.

The winding up of Westcor has come as a shock to member states and their power utilities especially that DRC President Joseph Kabila had previously assured the regional bloc that Westcor would develop INGA III.

As early as 2008, BHP Billiton was reportedly wooing the DRC government into appointing it the developer of the highly lucrative and viable hydroelectric INGA III project.