The political economy of regional hydropower investments in Africa

Eyita-Okon, Ekeminiabasi
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Africa has abundant potential to generate hydroelectric power. Yet with an uneven record of building large dams, much of this potential remains untapped. This thesis addresses the question of why some large dam projects have been built and others have not. The problem of credible commitment by host governments to prospective investors is central to the explanation. The problem is that while large dam projects require large investments over lengthy periods, after construction is complete host governments may face strong temptations to renege on their agreements with investors –in an environment that lacks a supranational authority to enforce agreements. Anticipating this, investors will be reluctant to invest, and many potentially mutually beneficial hydroelectric dams will go unbuilt. The empirical part of the thesis begins with a statistical analysis of hydroelectric potential and realised capacity in Africa compared to other regions. This is followed by comparative case studies of the Cahora Bassa dam in Mozambique, completed in 1974, and the Grand Inga dam in the Democratic Republic of Congo (DRC), still unbuilt despite plans stretching back decades. I show that the credible commitment problem in the Cahora Bassa case was overcome through strategic interaction between the Portuguese colonial host government and the South African apartheid government, which was the main investor and the principal consumer of the power generated. The credible commitment problem in the Grand Inga case has been much more intractable due to the larger numbers of investors and consuming countries involved, and importantly to political risk within the DRC. The thesis contributes to the understanding of how Africa can better exploit its hydroelectric potential, in an era of increasing emphasis on renewable energy sources
A dissertation submitted to the Faculty of Humanities, University of Witwatersrand, in partial fulfilment of the requirements for the degree of Doctor of Philosophy in International Relations, 2020