Fortescue Excluded From World’s Biggest Hydropower Plant Development

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(Bloomberg) — The company owned by Australian mining billionaire Andrew Forrest will not develop the world's largest hydropower project in the Democratic Republic of Congo, according to the office of President Felix Tshisekedi, who has replaced the company with a Nigerian oil producer.

Natural Oilfield Services Ltd. has signed An agreement in principle was reached with Congo on May 9 to build a smaller version of Fortescue Ltd's proposed Grand Inga project, which would have generated about 40 gigawatts of hydropower.

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The Lagos-based company has agreed to conduct feasibility studies to establish a 7-gigawatt facility on the Congo River, according to a statement from the presidential agency overseeing Inga's development. The revised proposal – which was reached at a ceremony held in the capital, Kinshasa – includes building an aluminum foundry and a refinery capable of processing 4 million tons and 8 million tons annually, respectively.

Authorities in New Delhi have charged the Indian owners of Natural Oilfield with absconding after defrauding public banks of about $1.7 billion. The company and the lawyer representing its founders did not respond to requests for comment.

If built at full capacity, Grand Inga will replace the Three Gorges Dam as the world's largest source of hydroelectric power. It has long faced headwinds from Congo's history of corruption and the projected cost of the multi-phase project — with some estimates exceeding $80 billion.

There are already two dams at the Inga site with a capacity of about 1.8 GW that were built more than 40 years ago. Most of this electricity is transported 1,000 miles across the country to power Congo's copper and cobalt mines, operated by companies such as CMOC Ltd. and China Railway Group Ltd. and Glencore Plc.

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Read more: The countdown to the world's largest green energy project begins

Fortescue itself replaced a consortium of Spanish and Chinese companies, which failed to develop a $14 billion, 11 gigawatt version of the project known as Inga III.

Congo's presidency told Bloomberg that Fortescue will no longer participate in the revised Inga plan.

“We have not been notified of any change to the instrument of agreement we have with the government of the Democratic Republic of the Congo, or to any other agreements signed with other parties,” a Forest spokesperson said in an email response to questions about the agreement. Thursday. “Fortescue remains open to continuing discussions about our future in the DRC.”

The Australian company planned to develop a green hydrogen project using Inga energy. The project's web page is no longer working.

Natural Oilfield is a subsidiary of Sterling Oil Exploration & Production Co., which pumps more crude oil into Nigeria than any company other than multinational giants Shell Plc, Exxon Mobil Corp and Chevron Corp. Sterling currently produces about 70,000 barrels per day, while Natural Oilfield currently produces about 70,000 barrels per day. The oil field this month commissioned a new oil block in the West African country, targeting production of an additional 40,000 barrels per day.

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India's top investigating agency charged Sterling's founders – Nitin and Chetan Sandesara – in late 2019. The Central Bureau of Investigation told the country's Supreme Court that the brothers committed a “well-calculated economic fraud” that left their Mumbai-headquartered group more than $100 million in debt. . 140 billion rupees ($1.7 billion) to public lenders.

Read more: Fugitive Brotherhood thrives in Nigeria as India chases $1.7 billion

In a complaint, the Indian Enforcement Directorate – another federal investigative agency – alleged that 60% of about $900 million raised between 2004 and 2013 for Indian Sandesaras was “ultimately diverted and laundered” before it was “transferred to Nigeria to finance their oil business.” . An Indian court announced that the two brothers had been on the run for nearly four years.

The brothers deny cheating their banks and want to reach a financial settlement with creditors, according to documents they submitted to India's Supreme Court.

The Congolese Inga Agency did not respond to questions regarding the allegations against the founders of Natural Oilfield.

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