Anzana backs $760m power plant in DR Congo

From the newsletter

US-based Anzana Electric Group has committed to funding the $760 million Ruzizi III hydropower plant, setting the ball rolling for the construction of the 206 MW plant located on the Ruzizi River between Rwanda and the Democratic Republic of Congo. The deal comes as part of peace talks mediated by the US between the two countries.

• The project has been under consideration for more than a decade but delayed by conflict. Its development might drive regional integration and strengthen energy security and stability.

• The signing of the peace agreement could open up the mineral-rich region to new investment and potentially increased power demand.

More details

• The hydropower plant will be the first of its kind tri-national Public Private Partnership in the region. It will be developed between the Private Sector Ruzizi III Holding Power Company Limited (RHPCL) and the three Contracting States: Burundi, the Democratic Republic of Congo, and Rwanda. Anzana intends to acquire at least a 10% stake in the project as early as September.

• Ruzizi III will join two other plants located on the river that divides Congo’s South Kivu province from Rwanda’s Rusizi District. All three countries are part of the planned public-private partnership that will build and operate the plant, which could open as early as 2030.

• In broader peace agreement terms, the involved parties have committed to launching a phased framework for regional economic integration within three months of the agreement's activation. This new framework, to be detailed in a separate document titled the "Regional Economic Integration Framework.”

• The framework's purpose is to boost foreign trade and investment, particularly from regional critical mineral supply chains, while also increasing transparency in these sectors. The parties will initiate or expand collaboration on several key shared priorities, including developing hydropower resources, reducing risks within mineral supply chains, jointly managing resources in Lake Kivu, and establishing transparent, formalised end-to-end mineral value chains (from extraction to processed metal) that connect both countries. This will be done in partnership with the US government and US investors.

• If successfully implemented, the peace deal could unlock significant investment in the Democratic Republic of Congo's economy. A prime example is the Grand Inga mega-dam, which recently secured $1 billion in support from the World Bank for its technical and feasibility studies. This substantial funding could instil confidence in US investors, encouraging them to inject capital into what is projected to become the world's largest hydropower dam upon completion.

• For decades, the DRC’s mineral riches have been both a blessing and a curse, enabling violence, illicit trade, and deepening economic hardship. This new agreement, however, links mineral access to improved governance, traceability, and regional cooperation. By acknowledging Rwanda's function in regional logistics and establishing a commitment to a jointly overseen, transparent minerals corridor, the deal provides an alternative to competitive geopolitical strategies, moving towards a framework of shared benefits.

Our take

• This peace agreement, founded on shared resources and joint management, could become a blueprint for other countries if successful. Its framework could be applied in places like Guinea, Liberia, Mozambique, and Tanzania.

• Investing in the Democratic Republic of Congo's vast hydropower potential could help revitalise its mineral-rich industries, providing crucial access to critical minerals that the US urgently needs. This would boost economic development and bring much-needed peace to a country long afflicted by the "mineral curse."

• African countries must formulate policies that allow for regional cooperation and integration, especially regarding cross-border resources, to avoid future conflicts.