IFC takes its first steps to address Bujagali dam complaints

24 July 2018

After Uganda’s Bujagali hydroelectric dam received a refinancing boost from the World Bank Group’s (WBG) board in March, the International Finance Corporation (IFC, the Bank’s private investment arm) announced steps in May to address issues raised in previous Compliance Advisor Ombudsman (CAO, the IFC’s independent accountability mechanism) complaints.

The IFC outlined the initial activities it has committed to, in order to address issues stemming from the project found by CAO. These refer to cases 04, 06 and 07 of the CAO’s investigation of a complaint against Bujagali Energy Ltd and World Power Holdings, Uganda. Whilst no timeline has been provided by IFC for the proposed activities, they have stated that they are committed to providing an update on any progress made by March 2019. Josh Klemm of US-based NGO International Rivers remarked that whilst, “it’s too early to prejudge the outcome, what is most important is for IFC to undertake meaningful consultation with the aggrieved parties, and to set aside funds to compensate them.”

Prior to the Bank’s decision to approve refinancing, 23 civil society organisations, including the Uganda-based National Association of Professional Environmentalists and the National Union of Disabled Persons of Uganda, wrote a letter to IFC CEO Philippe Le Houérou and World Bank Group CEO Kristalina Georgieva, voicing their concerns about unresolved environmental and social issues related to the dam, including land compensation and compensation for workers stemming from the dam’s construction between 2007 and 2012 (see Update 59, 56, 55).

More recently, a complaint made in 2016 concerning Bujagali’s environmental offset area – Kalagala falls – has resurfaced. As summarised in an article published by US-based CSO Bank Information Center, “The complaint alleges that [Bank] Management failed to take appropriate actions to protect an offset area it agreed…through a written agreement with the government of Uganda, in violation of its operational policies.” The Bank’s board is expected to make a decision in August about whether this complaint warrants an investigation by the Bank’s accountability mechanism, the Inspection Panel.