World Bank approves extra measures at Bujagali

The board of executive directors of the World Bank has approved a number of measures to address the utility and sustainability of the controversial Bujagali hydropower project at Jinja in eastern Uganda, after a Bank inspection panel raised a number of concerns. The World Bank announced its approval of financial assistance totalling up to US $225 million to support the building of a large-scale dam near Bujagali Falls on the River Nile in December 2001, although the project has been criticised by environmental groups, which say the dam could cause irreversible social and environmental damage to the area The project, to consist of a 200-MW hydropower station, would be a "key investment" in poverty reduction in a country where less than 3 percent of the population has access to the national grid, according to the World Bank. [http://web.worldbank.org] The US-based NGO International Rivers Network (IRN) says the hydropower plant would create a "socially and environmentally destructive reservoir, and would drown the spectacular Bujagali Falls". It would also would submerge highly productive agricultural land, increasing stress on land near the reservoir, resulting in "further watershed degradation and deforestation and a loss in soil productivity," it added. The project would do little to improve the livelihoods of the vast majority of Uganda's population not connected to the national electricity grid, could "preclude Uganda from pursuing a sustainable energy path and would ultimately come at the expense of the rural poor", IRN stated on its web site. [www.irn.org/] Amid concern that end users would not be able to afford the electricity to be generated at Bujagali, the directors agreed to "closely monitor future electricity demand growth, sector investments, billing and collections, and tariff levels" in Uganda, and to identify measures, if needed, to mitigate their impact on the cost to consumers of electricity. The Bank directors agreed that the agreement between Uganda and the World Bank should be amended to reaffirm the government’s commitment not to develop the Kalagala Falls, downstream of Bujagali, for hydropower. In that light, the government had reaffirmed its earlier commitment to set aside the Kalagala Falls for ever, "exclusively to protect its natural habitat, environmental and spiritual values, and for tourism", the World Bank stated on Monday. The Bank has also been engaged in efforts to ensure that the Ugandan government does not develop any hydropower initiatives at Murchison Falls, in northwestern Uganda, in accordance with its status as a World Heritage Site, and to preserve the Mabira Forest Reserve on the banks of the Kalagala Falls - in mitigation of the environmental loss caused by the Bujagali hydropower scheme. Other measures agreed by the World Bank board were to support the examination of alternative power sources, including geothermal; monitor implementation of agreements to be signed with tourism operators and support measures to be taken to address re-employment of Ugandan citizens affected by loss of tourism-related jobs; and encourage focused surveys to support implementation and monitoring of the Community Development Action Plan. "I think we’ve looked at that from a fairly broad perspective, in terms of the alternatives, the costs and benefits," the outgoing World Bank representative for Uganda, Jim Adams, told IRIN in April. "We have come up with a judgement that we feel Bujagali is a sustainable investment, from an economic and financial point of view, but also one that - while it has some environmental costs - has fewer environmental costs than most of the realistic alternatives... In the end, we remain confident that this is the most appropriate investment for the power sector in Uganda at this time," Adams added. The Bank's Vice-President for the Africa Region, Callisto Madavo, said on Monday that the Bujagali project - and alternatives in Uganda - had been carefully assessed, because "electricity shortages have substantially impeded investment, private sector development and economic growth". Expanding electricity supply is a critical requirement for achieving the goals set out in the government’s Poverty Eradication Action Plan – goals for which the donor community has provided full support and substantial financing," he added.