(Bloomberg) -- General Electric Co. signed a preliminary accord with the Democratic Republic of Congo to develop several energy and health projects in the central African country.
The two parties signed a memorandum of understanding on the projects on Wednesday in the Congolese capital, Kinshasa. The deals could be worth about $1.8 billion, according to two people with direct knowledge of the talks.
GE South Africa Ltd. and Congo are discussing about $1 billion worth of hydropower projects that would add some 1,000 megawatts of power to Congo's grid over the next three years, the people said, asking not to be identified because the information isn't public. Discussions are also being held on about $800 million of health-related infrastructure investments, they said.
The deal may include the rehabilitation of turbines on the Inga I and II dams that would return about 650 megawatts of power to the grid, Eric Amoussouga, GE's chief executive officer for francophone Africa, told reporters.
GE is also looking at the possibility of producing energy through liquefied natural gas projects, he said.
Congo's rivers could produce more than 100,000 megawatts of energy but the country has only about 2,500 megawatts of installed hydropower, much of which isn't functional, according to the national electricity company, SNEL. Only 9% of Congolese have access to electricity.
The country is currently in talks with the African Development Bank to develop a third dam at the Inga site on the Congo River. It could provide as much as 11,000 megawatts but could cost more than $14 billion.
“We currently have a power deficit of about 4,800 megawatts,” Serge Tshibangu, an energy adviser to President Felix Tshisekedi said Wednesday. “The GE deal would let the president lower that deficit quickly by more than 20%, instead of waiting around several years for Inga III.”
U.S. Ambassador to Congo Mike Hammer said the GE preliminary accord means that “once again, Congo is open for business and open for American investments.”
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To contact the reporter on this story: Michael J. Kavanagh in Kinshasa at mkavanagh9@bloomberg.net
To contact the editors responsible for this story: Benjamin Harvey at bharvey11@bloomberg.net, ;John McCorry at jmccorry@bloomberg.net, Paul Richardson, Liezel Hill
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