23 June 2008
World Bank involvement in the proposed Inga and Kafue dams has brought criticism over the continued reliance on hydro in a warming world, and intentions to power foreign mining companies.
According to a recent Reuters report, the Bank’s private sector lending arm, the International Finance Corporation (IFC), is taking the lead on financing feasibility studies for the proposed Kafue Gorge Lower Dam in Zambia. Preparations for the proposed 750 MW dam have been revived – the dam was initially proposed in the 1970’s - to address recent energy shortfalls affecting the country’s lucrative copper mining industry.
Kafue is being promoted as the largest privately funded power project in Africa, and the expected output of the dam would represent three times the purported capacity of the controversial World Bank-backed Bujagali Dam in Uganda, which has been criticized as highly vulnerable to climate change-induced drought and economically inviable. The accountability mechanisms of both the World Bank and African Development Bank (AfDB) are expected to submit their investigation reports for Bujagali this month, in response to complaints from local groups about these and other concerns.
Meanwhile, the World Bank has indicated that it is considering backing the construction of the Kafue Dam with a partial risk guarantee, similar to one it announced for Bujagali last December. The Kafue site is located on a major tributary of the Zambezi River, and the project is expected to cost over $1 billion. The stated reason for resurrecting the project – ensuring continued energy supplies for foreign mining operators - brings into question the Bank’s poverty reduction mandate, as Kafue is expected to do little to address low levels of energy access of Zambia’s impoverished people.
Similar questions are being raised about the much-vaunted Inga Dam complex on the Congo River in the Democratic Republic of Congo (DRC). A recent conference of potential financiers for the Inga 3 hydro project, held in London, brought together private investors, multilateral institutions and representatives from southern Africa’s power utility companies to raise the estimated $6 billion required for the construction of the proposed 4500 MW project. Inga 3 is widely seen as the first step in realizing the ambitious Grand Inga Dam which, at a supposed capacity of 44,000 MW, would be the largest dam in the world, dwarfing China’s Three Gorges Dam, and costing upwards of $80 billion.
The World Bank, AfDB, and the European Investment Bank (EIB) are all keen to take part in Inga: rehabilitating the existing Inga 1 and 2 dams, financing feasibility studies for Inga 3, convening investors, and constructing transmission lines. The institutions appear poised to champion a continued reliance on in DRC and more broadly across Africa. However, the development benefits of these initiatives remain unclear, as nearly all the output is earmarked for export and to ease the expansion of major mining operations in the region.
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