Increased pressure against World Bank dam in Uganda

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afrol News, 22 May - 120 non-governmental organisations (NGOs) from 34 countries demand that the World Bank not support the Bujagali Dam in Uganda unless a series of conditions are met. They claim the dam will add to Uganda's unsustainable debt burden, and that geothermal power would be cheaper and less destructive. The Bank's decision to support the project is allegedly made on manipulated data.

Bujagali is a hydropower project on the Victoria Nile in Uganda. Sponsored by the US-based AES Corporation, the 200 MW venture is the largest private power project in Sub-Saharan Africa. 

The World Bank plans to extend a political risk guarantee of US$ 215 million for Bujagali in early June. In December 2001, the World Bank also had approved loans and guarantees of US$ 225 million for the Bujagali Dam. Several export credit agencies - including from the US, UK, Germany and Sweden - have declined support, saying the project was too risky. 

120 environmental and human rights groups from 34 countries, including many groups from Uganda, yesterday stated their objection to the World Bank guarantee for the project. A report released earlier this month - demonstrating the World Bank's decision had been based on data manipulated by its staff - had made the NGOs react. 

- Bujagali is not the least-cost option for Uganda's power sector, is economically highly unfavourable, and will add to Uganda's debt burden, the NGOs maintain in a letter to the Bank's Executive Directors dated 20 May. The letter was prepared by Uganda's National Association of Professional Environmentalists (NAPE), International Rivers Network (IRN), and Friends of the Earth/US (FoE/US). 

In the letter, the groups asked that before the World Bank approves any more support for Bujagali, several conditions should be met. These foremostly included an unbiased study of the economic viability of Bujagali and of alternative options; and the releasing to the public of a study by the Bank's internal investigative body and the power purchase agreement, which defines Uganda's long-term financial obligations under the project.

Bujagali Falls

Bujagali Falls

Photo: AES

- When the World Bank appraised the Bujagali project, it consistently disregarded more appropriate alternatives, including Uganda's huge potential for geothermal power, says Lori Pottinger, the director of IRN's Africa programme. "The experience of World Bank funded projects in Kenya demonstrates that geothermal plants can be developed faster and at lower cost than large dams."

- Ugandan citizens filed a complaint with the World Bank's Inspection Panel in July 2001, documenting the violation of the Bank's social, environmental and cultural policies, says Frank Muramuzi, the President of NAPE. "It would be scandalous if the World Bank approved further support for Bujagali before the Panel presents its findings."

- The Power Purchase Agreement, which entails financial obligations of more than US$ 1 billion for Uganda, has so far been kept secret, says Carol Welch, the deputy director of FoE/US' international program. "Particularly after the Enron scandal, the World Bank should not become an accomplice in such non-transparent deals."

A report released by IRN on 13 May showed that World Bank management "manipulated data to gain Board approval for the project." The study concluded that "Contrary to Bank management claims, official documents show that the dam is not the cheapest option for generating electricity in Uganda." 

According to the IRN analysis, the World Bank's appraisal of Bujagali's economic viability contains "major discrepancies with other relevant Bank reports. When presenting the project to the Executive Board, World Bank management neglected, withheld or misrepresented critical information from other Bank documents." 

The operator of the project - AES through its project company AES Nile Power - however holds that the Bujagali project site "was selected as it is one of the most environmentally and socially benign hydro options on the Nile." The company emphasises that "Uganda's economy desperately needs electricity" and that the project therefore will be "the only true option Uganda has to meet its core electricity demands." 

Sources: Based on IRN, AES and afrol archives

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