In accordance with articles 213 paragraph 1 and 214 paragraph 1 de la constitution du 18 février 2006 telle que révisée à ce jour, le Président de la République Démocratique du Congo (« RDC ») a, en date du 21 novembre 2014 promulgué la loi n° 14/026 du 21 Novembre 2014 autorisant la ratification par la République Démocratique du Congo du traité relatif au projet hydroélectrique Grand Inga entre la République Démocratique du Congo et la République Sud-Africaine (« RSA »).of the Constitution of February 18, 2006 as amended to date, the President of the Democratic Republic of Congo ("DRC”) promulgated on the 21st November 2014 the Law No. 14/026 authorizing the ratification by the DRC of the Treaty relating to the Grand Inga hydroelectric project between the Republic of South Africa ("RSA") and itself
I. PURPOSE OF THE TREATY
The Inga Project aims at building a hydroelectric complex on the Congo River, on the site named Inga Site whose installations are based in the West of the DRC, 150 km from the mouth of the Congo River, South-West of Kinshasa. The Inga Falls are made of a series of rapids and falls causing a 96 m slope in the river.
The Inga Project, in all its hydroelectric complex, is expected to reach a production level of more than 41.000 MW. Otherwise, it aims at producing and selling electricity and building transmission lines for the transfer of electricity as determined at each phase of the project. 
Visant la transformation rapide, par phases du potentiel d'Inga en énergie utile, ce traité a pour objets (i) d'affirmer l'engagement commun des parties dans le projet,(ii) mettre en place des structures fonctionnelles nécessaires pour mettre en œuvre le traité,(iii) permettre aux parties d'échanger des engagements concernant le projet,(iv) et développer un cadre favorable pour faciliter la mise en œuvre du projet.Aiming at speedy transformation through phases of the Inga potential into useful energy, the Inga Treaty has the purpose to (i) assert the joint commitment of the parties in the project , (ii) set up necessary functional structures for the implementation of the treaty, (iii) enable the parties to exchange engagements regarding the project, and (iv) develop a favorable framework to facilitate the implementation of the Inga Project.
Doté de 21 articles, le traité consacre notamment (i) la reconnaissance de la proprièté et de la souveraineté de la République Démocratique du Congo sur le site d'Inga, un patrimoine du peuple Congolais, (ii) le leadership de la RDC dans le processus à travers une agence nationale, la reconnaissance du caractère régional et intégrateur du projet, la RDC pouvant alimentée tout pays demandeur d'énergie d'Inga après satisfaction de ses propres bésoins,(iv) et la garantie d'un débouché fiable et solvable pour l'énergie à générer par le projet, facilitant sa bancabilité.The Inga Project establishes particularly, (i) the recognition of ownership and sovereignty of the DRC on the Inga site, a patrimony of the Congolese people, (ii) the leadership of the DRC in the process of promoting, developing and implementing the project through a national agency, (iii) the recognition of the regional and integrating aspect of the project, the DRC being able to supply to any country seeking the Inga energy, after satisfying its own needs, and (iv) the guarantee of a reliable and solvent market for the energy to be generated by the project, hence facilitating its bankability.
Il ressort de ce traité, la partie RDC s'engage à prendre des mesures raisonnables pour (i) acheter 2.300 MW d'énergie produite par la phase I Inga 3 basse chute à des conditions, en ce compris les tarifs qui seront convenus par les entités concernées,(ii) de créer une agence nationale,seule autorité compétente pour la promotion, le développement et la mise en œuvre du projet, (iii) etadopter les lois et règlements régissant le projet que la RDC pourra juger nécessaires.It derives from the treaty that the DRC agrees to take reasonable measures to (i) purchase 2,300 MW of energy produced by Phase I Inga 3 Basse Chute under conditions, including the price lists to be agreed on by the entities concerned, (ii) create a national agency, the only competent authority for the promotion, development and implementation of the project, and (iii) adopt laws and regulations governing the project that the DRC may deem necessary.
As for the RSA, it agrees De son côté, la RSA s'engage à prendre des mesures raisonnables pour (i) acheter 2.500 MW d'énergie ce qui représente 20% produite par la phase 1 d'Inga 3 basse à des conditions qui serons convenues par des entités concernées , (ii) initier la négociation d'un contrat d'achat d'électricité pour l'achat de 2500 MW d'énergie produite par la phase I Inga 3 basse chute dès que raisonnablement possible.As dfA to take reasonable steps to (i) purchase 2,500 MW of power, which represents 20% of what is produced by phase 1 Inga Basse Chute, on terms that will be agreed on by the entities concerned, (ii) initiate negotiation over electricity purchase contract for the purchase of 2,500 MW of energy produced by Phase I Inga 3 Basse Chute as soon as reasonably possible.
En outre le traité institue dans la chef des parties les obligations communes consistants à prendre des mesures raisonnable pour (i) conclure un protocole relatif à l'exploitation de l'inter connection si nécessaire,(ii) autoriser l'accès à la résidence des ressortissants de l'autre partie impliquée dans le projet si nécessaire,(iii) et prendre tout autre mesure nécessaire pour faciliter les objectifs du projet.In addition, the treaty establishes on the part of the parties common obligations to take reasonable measures to (i) enter into a protocol relating to the running of the interconnection, if necessary, (ii) authorize access to the residence for the nationals of the other party involved in the project, if necessary, and (iii) take any other necessary measure to facilitate the objectives of the project.
II. INSTITUTIONS CREATED BY THE TREATY
In order to enable the monitoring and realization of the Inga Project throughout its implementation, the Treaty established the creation of structures, including: (II.1) the National Agency, (II.2) the joint ministerial commission,Par ailleurs, le traité a institué (i) une Agence nationale1seul autorité compétente pour la promotion, le développement et la mise en œuvre du projet, (ii) une Commission Ministérielle Conjointe (C MC) et (iii) une Commission Technique Permanente Conjointe (CTPC). (“JMC”), and (II.3) the Joint Technical Permanent Committee (“JTPC”).
II.1 National Agency
The National Agency will be created at the initiative and under the responsibility of the Government of DRC pursuant to its constitution and laws.
Only competent organ for the promotion, development and implementation of the project, Les compétences de l'Agence Nationale comprendrons sans imitation (i) la détermination du cadre du projet, (ii) le lancement de chaque phase du projet, (iii) la sélection des partenaires privées (iv) et l'octroi et la gestion des concessions en portant une considération appropriée aux recommandations de la CMC et de la CTPC.the competencies of the National Agency will include, without limitation (i) the determination of the framework of the project, (ii) the launch of each phase of the project, (iii) the selection of private partners, and (iv) the granting and management of concessions by giving appropriate consideration to the recommendations of the JMC and JTPC.
The competences here above attributed to the National Agency will be assigned to and exercised by the Congolese ministry in charge of electricity (Ministry of Energy and Hydraulic Ressources) or by any governmental body designated par the latter until the creation of the said National Agency will be effective.
II.2 The Joint Ministerial Commission
The Joint Ministerial Commission (“JCM”) is formed by the Treaty and is responsible for assuring that the project is implemented in accordance with the provisions of the treaty (ii) and reviewing the reports coming from the JTPC.
The CMC is cComposée des Ministres en charge de l'Electricité de chaque Etats et de tout autre Ministre dont la présence serait jugée nécessaire, la CMC aura pour tâche de (i) s'assurer que le projet est mis en œuvre conformément aux dispositions du traité (ii) examiné les rapports et sujets venant de la CTPC.omprised of the Ministers in charge of Electricity of each State and any other Minister whose presence is deemed necessary. It meets at least twice a year and makes its decisions by consensus.
II.3 The Joint Technical Permanent Commission
The Joint Technical Permanent Commission (“JTPC”) acts as technical body facilitating the implementation of the Inga Treaty. It is comprised of representatives designated by each party with a substitute for each designated representative, their names being communicated between the parties within the tree months following the entry into force of the Inga Treaty. The designated representatives and their substitutes can be replaced or revoked at any time by the designating party, the replacement or revocation being subject to notification to the other party, provided that the revocation or the replacement can take effect one month after the notification.
The JTPC will execute its tasks, for the Phase I of the Project, starting from the entry into force of the Inga Treaty to the beginning of operational services for the said phase. It will execute its other tasks, regarding the other phases of the project, starting from the date RSA or its designated entity will have manifested its buying interest by each of the phases until (i) either the date of the refusal by RSA of the offer formulated by DRC to purchase the energy produced by the concerned phase, (ii) or the date of the termination or end of the contract of purchasing electricity as concluded by RSA or by a buyer from RSA by this phase, or (iii) the date of the beginning of operational services of the phase.
The tasks of the JTPC end with the realization of a considered phase of the Project. The JTPC can resume its activities for such a phase for which it had previously ceased acting, if the parties to the Treaty recognize the necessity to consider exceptional events or circumstances related to the said phase.
The tasks of the JTPC will consist in submitting recommendations to the National Agency relating, inter alia, (i) to the terms of reference of the feasibility studies, to the documents of the project and to structuring questions, except for the feasibility studies already accomplished or being conducted relating to the Phase I, (ii) to the fundind agreements, (iii) to the production, transportation and supply of the energy produced by the project.
Moreover, the JTPC will serve as a forum for issues of common interest in connection with the development process of such a phase, relating in particular to the production, transportation and supply to the RSA of the energy produced by the phase of the project.
For the execution of its tasks, the JTPC determines its own internal regulations during its first meeting, which regulations will be submitted to the JMC for approval. It makes its decisions at the unanimity of the delegations of the parties. When a consensus cannot be reached, the JTPC refers the decision to the JMC.
III. REALIZATION OF THE INGA PROJECT
For the realization of the Inga Project, the parties have agreed on the principles guiding the funding of the project (III.1), the buying and the prices of the energy on the transportation lines and the regional interconnection, and also (III.2) on social and environmental considerations (III.3).
III.1 Project funding
En ce qui concerne le financement du projet, le traité prévoit les parties feront des efforts pour faciliter la réalisation de la phase I du projet par le financement sous réserve que la revue de l'étude de faisabilité de la RDC soit acceptable et selon les termes et conditions à convenir.Regarding the funding of the project, the Treaty provides that the parties will make reasonable efforts to facilitate the implementation of Phase I of the project by funding, provided that the review of the DRC feasibility study is acceptable, and according to the terms and conditions to be agreed on.
Pour ce faire, la RSA par le billet de ses institutions financières ou des tiers facilitera la récolte de fonds, ce qui entraine comme conséquence que l es tarifs seront convenus par les entités concernées en vue de couvrir l'ensemble des couts de retour sur investissement et les droits et redevances que pourraient imposer la RDC.Hence, RSA, through its financial institutions or third parties, will facilitate fundraising, and as consequence, the price will be agreed on by the entities concerned to cover all return on investment costs and fees and charges that the DRC may impose.
S'Agissant des lignes de transport et inter connecteur régional, le point de livraison de l'énergie achetée par l'acheteur RSA se situera à la frontière entre la RDC et la Zambie (1).As for transmission lines and inter-regional connector, the delivery point of the energy purchased by the RSA buyer will be on the border between the DRC and Zambia.La RSA mettre en place des mécanismes de transmission nécessaires pour permettre le transport de l'énergie achetée par elle depuis le pont de livraison jusqu'à la destination finale (2).La RDC quant à elle permettra le transport de l'énergie achetée par la RSA depuis le site Grand Inga jusqu'au point de livraison.RSA will implement the necessary transmission mechanisms for the transportation of the energy it will purchase from the deck of delivery to the final destination.The DRC, in turn, will allow the transportation of energy purchased by RSA form the Grand Inga site to the point of delivery.
Dans le souci d'encourager le développement du secteur privé au niveau régional, d'autres entités sont aussi invitées à participer aux appels d'offres pour la fourniture des biens et services pour les besoins du projet.In order to encourage the development of the private sector at the regional level, other entities are also invited to participate in the public bids for the supply of goods and services for the needs of the project.
En effet, le traité prévoit que les deux parties se conviennent de tel en sorte que l'exploitation du projet ne puisse nuire à la qualité de l'environnement et du bien-être des personnes et des communautés directement affectées par ce projet.Indeed, the Treaty provides that both parties agree to ensure that the operation of the project does not harm the quality of the environment and the well-being of people and communities directly affected by the project.
Dans l'hypothèse ou une partie est remplacée ou succédée par une autre, le traité prévoit que tout Etat qui le succèdera sera considéré comme partie au présent accord et sera lié par le traité.In the event that a party is replaced by another, the Treaty provides that the Successor State shall be considered a party to this Treaty and shall be bound by it. Elle ne créera des droits et obligations qu'envers les parties et n'aura d'effet dans aucune juridiction.The Treaty creates rights and obligations towards the parties and shall have no effect in any jurisdiction.
Finally, the Treaty organizes the dispute resolution process for any dispute that may arise in connection with its interpretation and application, namely the amicable solution or in the alternative, the submission of the dispute by one party to arbitration.
III.2. Sales and energy pricing
As regards the purchase of energy produced by the Inga Project, the parties to the Treaty have already agreed on the right of RSA to purchase 2,500 MW produced by Phase I Inga.
As for its other phases, the volume of energy for sale to the RSA will be subject to the DRC’s right to meet at first its internal energy needs, this right having priority. To this end, after completion of each phase, the DRC will offer to RSA the purchase of at least 20% of the energy that shall be produced subject to negotiating additional energy volume. It will put forward a written request of expression of interest to the RSA. In return, in compensation, RSA will manifest its interest to purchase or negotiate additional energy volume which will not exceed 30% of the total energy that shall be produced by this phase.
In this case, the DRC will ensure that selected developer of the phase concerned in the Inga Project will make a written sales offer to the RSA for the energy requested, which will take into account (i) the reversing cost on investment and the rights to dues that the DRC may impose in this phase and (ii) the price of energy that could be produced by alternative projects. The principles governing the sale and purchase of energy will be subject to appropriate mechanisms and procedures defined in a separate protocol. The sales offer intended to the RSA will set forth the duration of the phase and necessary elements for reasonable assessment of the offer.
Within a period of three (3) months after receipt of the offer from the DRC or the Company of the project concerned, RSA or any entity designated by it has the right to accept or reject such offer. The RSA will, within a period of sixty 60 days (2 months) of acceptance of the offer, make a payment into an escrow account according to the terms agreed on of the amount of 10 million US dollars on financial terms of 2013 as guarantee.
On the other hand, in case of refusal of the RSA (in that it has not answered within three (3) months) of the offer, the DRC or developer will have the right to sell to a third party any required energy initially planned for RSA but not in the most favorable conditions than those offered for RSA.
Lastly, in order to encourage the development of the private sector at the regional level, parties to the project agree to make reasonable efforts to ensure that entities established in the SADC region are invited to participate in tenders for the supply of goods and services of the Project and for the purposes of any necessary transmission mechanism for the transmission of the energy produced by the project to RSA.
III.3 Transportation lines and regional interconnection
The parties to the Inga Treaty plan the construction, exploitation and maintenance of transportation lines associated to the Inga project, for the evacuation of the produced energy towards the DRC’s internal market and the exportation abroad, particularly for the inter regional connection.
The feasibility study conducted by AECOM-EDF initially planned a continuous transportation line towards South Africa from the Inga site to the WitKop site, but RSA manifested its intention to inject electricity into the Southern African Power Pool (SAPP)’s network from Zambia.
Regarding the transportation lines and regional interconnection, the Treaty states the principles meant to govern the responsibility of constructing the transportation lines and the transfer of ownership in the following way:
- the construction, exploitation and maintenance of the line delivering 4.800 MW of the electricity produced in the first phase to the Kolwezi substation will be included in the perimeter of the Project and under the responsibility of the Inga Project company (SPV).
- in the event that these lines will not be included in the perimeter of the Inga Project, their construction, exploitation and maintenance would be the sole responsibility of the DRC and not the RSA.
- The RSA will entirely be responsible for the construction, exploitation and maintenance of a transmission line of approximately 150 km linking the Kolwezi substation to the virtual delivery point to the RSA, located at the frontier between DRC and Zambia, in order to transmit the exported electricity via the RSA itself or any other potential entity the latter will have designated and to whom the DRC will have to grant a concession in acceptable terms. In the event the DRC will not have granted such a concession, the obligation resting on the RSA ceases and will have to be renegotiated by the parties without modifying the principle agreed upon regarding the delivery point of the energy in the electricity purchase contract.
- the point where the transported energy will be delivered, situated at the frontier between Zambia and the DRC at approximately 150 km form the Kolwezi substation, is the place of the transfer of the ownership and the risks from the Project company (SPV) to the RSA or to any other potential entity designated by the latter as party to the electricity sales contract. It has to be noted that the DRC will transport the energy up to the Kolwezi substation without ownership and risk transfer, whereas the RSA or the entity designated by it assures the continuation of the transportation from this Kolwezi substation to the point of ownership and risk transfer.
- in order to establish electricity measures to be used as base for the calculation of amounts due under the electricity purchase contract and to agree on adequate ways of compensation for losses suffered from the Kolwezi substation to the delivery point, an appropriate meter will be installed at the Kolwezi substation.
III.4. Social and environmental considerations
In order to preserve the welfare of the people and the communities affected by the project, the parties to the Treaty agree that the exploitation will take into account and respect the environmental regulations.
IV. DISPUTE RESOLUTION
The method of resolution of disputes that may arise in connection with the interpretation and the implementation of the Treaty, is the consultation or negotiation between parties. If the request of a party to the Project of such negotiation or consultation does not succeed within six (6) months, the dispute shall be submitted at its request to an arbitration court.
The Arbitration Court at its headquarters in Geneva, Switzerland, and the most diligent party shall appoint an arbitrator within two months of receipt of the request for arbitration. A national of a third State shall be appointed as President of the Arbitration Court. Failing that, within 6 (six) months, one of the parties will invite the President of the International Court of Justice to appoint any other arbitrator who shall resolve the dispute based on the Treaty and the principles of international law and thus the decision rendered will be binding on all the parties, each party will be responsible for all expenses and other costs incurred in arbitration.
V. DURATION AND ENTRY INTO FORCE AND EFFECT
It is provided that this treaty will remain in force for an initial period of ten (10) years. When the deadline expires, RSA would have to purchase 2,500 MW of energy produced by Phase 1 Inga 3. The DRC shall notify its intention to denounce the Treaty through diplomatic channels at any time, which will result in, none of Electricity Purchase Agreement will be in effect.
During the period of twelve (12) as from the date the DRC would give notification of its denunciation of the Treaty, only its provisions will continue to apply exclusively in respect of the rights acquired up to the termination of such rights and obligations.
The Treaty enters into force within (30) days after receipt of the last notification. Upon entry into force, the Memorandum of Understanding signed between the Parties shall be automatically terminated.