The role of the world bank in the dam projects in Ethiopia : a case of inconsistency?

Abstract

The scope of this dissertation is to examine in a single, interpretative case study, the role of the World Bank (henceforth ‗the Bank‘) in the construction of Gibe III Hydropower plant, one of the largest hydropower projects in Ethiopia, in the southern part of the country on the Omo River, which provides about 90% of Lake Turkana‘s freshwater. The Bank has provided financial lending for more than 150 projects across Ethiopia, and it is currently involved in the financing of other 25 projects in different sectors in the country. In 2009, the Bank agreed to become involved in providing fund for the Gibe III Dam, the aim is to increase power production in Ethiopia, enabling it to generate revenue from the export of power to neighbouring countries that are less endowed with hydropower generation capacities. However, a number of local and foreign civil society groups together with academics and analysts declared their strong opposition to the Gibe III Hydropower project, citing several important social and environmental issues of great concern. The Bank stopped its financing plan and discontinued its feasibility studies, complaining on the lack of transparency in government and administration in Ethiopia, in particular the absence of competitive bidding for the prime contractor for the construction of the dam. For the critics, the Gibe III Dam project does not only violate domestic laws but also infringes the Bank‘s set of ‗safeguard policies,‘ even though the Ethiopian government claims that it has made a comprehensive Environmental and Social Impact Assessment (ESIA). In July 2012 the Bank agreed to facilitate a loan for the building of Eastern Electricity Highway Project (EEHP), also in the energy sector in Ethiopia, which connects it with neighbouring Kenya. The EEHP is transmission line on which the Gibe III Dam project depends. The Ethiopian government, Chinese Hydropower Company, and Chinese Banks have provided the necessary financial support for the Gibe III Dam that will become fully operational to generate power by early 2016. Critics argue that the government assessment disregards trans-border negative impacts, and it was approved by the government‘s Environmental Protection Agency (EPA) three years after construction of the project was begun. Many questions have been raised concerning the decision of the Bank to provide fund for EEHP that has strongly facilitated the development of Gibe III Dam through the backdoor. The part played by the Bank, through the EEHP, in the construction of a destructive hydropower plant has generated controversy and debate. However, available literature offers little information on the role of the Bank, and on some of the most significant aspects of the main challenges to the society and environment as a result of the dam. The research-guiding question for this dissertation is whether the role of the Bank in the development of the Energy sector is a case of inconsistency, in terms of its own ‗safeguard policies‘ designed to ensure that indigenous people and the environment are not negatively affected as a result of Bank-funded projects. The research is set to expound on the importance of the EEHP for the transfer of power supply from Gibe III to Kenya, review the ESIA that was published by Ethiopian government, and elaborate the social and environmental costs of Gibe III project. The dissertation also highlights the legacies of large dams – funded by the Bank – and their adverse impacts and economic performances in developing countries. It underlies the multifaceted and complex challenges behind the array of figures of economic analysis. The theoretical perspectives are utilised to assess some of the most critical implications of the Bank‘s rational choices. The methodology employed to collect data is elaborated. The primary and secondary data are collected to reveal as much of the information about the research. The main conclusion is that the special interests of interest groups frequently appear to preside over legitimate concerns of the rural poor and environment.