The planned Bujagali Dam in Uganda violates key social and environmental policies of its major funders: the African Development Bank (AfDB) and the World Bank. These new and devastating conclusions have just been presented by a AfDB research panel.
Wetlands International and the Ugandan organisation NAPE call on AfDB and other financiers to immediately suspend all financing for the Bujagali Dam.
The Bujugali dam is planned in the river Nile, just downstream of Lake Victoria, in Uganda. Some building activities have already started although the donors still have to give their final approval for supporting the project financially. Wetlands International in cooperation with NAPE have raised their concern several times to the donors and the Ugandan government. The findings of the panel do, however, confirm the concerns of both environmental organizations.
AfDB’s Compliance Review and Mediation Unit
The report is the first by the Bank's new Compliance Review and Mediation Unit (CRMU). Their investigation was undertaken in response to a claim by project-affected people and the National Association of Professional Environmentalists (NAPE); an Ugandan Non-Governmental Organisation (NGO) supported by Wetlands International, a global conservation NGO. Moreover, a panel from the World Bank apparently came to similar conclusions. Their report is expected soon.
The serious main violations that the AfDB panel has reported on are:
1. The risk of causing a further lowering of the water level of the lake, which could be triggered by the need for constant flows by the Bujagali Dam from Lake Victoria, even during droughts, The lake level has dropped in recent years in part because of poor management of existing dams.
2. The hydrological risks resulting from climate change wwere not accounted for, and no attempt was made to assess how these risks could affect the dam's economic viability.
3. Energy alternatives to the dam were poorly analyzed. Combined with concerns about the project's rising cost, the CRMU states: "The Bank (AfDB) failed to comply with the applicable policies which require Bank staff to provide full explanations and justifications in the Bank’s appraisal documents for the selection of Bujagali".
4. Project costs for resettlement and biodiversity losses were not fully accounted for, nor are there any plans in place to ensure that mitigation of these impacts will be achieved.
The dam is being developed by Bujagali Energy Limited (BEL), which is a consortium between Industrial Promotion Services (IPS) of Kenya (a division of the Aga Khan Fund for Economic Development), and Sithe Global, a US power company now 80% owned by the Blackstone Group. The dam is being built by Italian firm Salini. The project is expected to take up to 44 months to construct.
Costs of the dam
Of the total development costs, the AfDB is lending $110m. Another $360m will be provided by the World Bank Group (the International Finance Corporation (IFC) is providing a $130m loan to BEL; the International Development Association is providing $115m for the project's commercial lenders; and an investment guarantee of up to $115m is to be supplied by the Multilateral Investment Guarantee Agency). The European Investment Bank will lend $135m.
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