World Bank’s thirst for hydropower
World Bank’s thirst for hydropower
27 February 2014
Summary
•IFC linked to controversial hydropower project in Guatemala through financial intermediary
•Bank postpones decision on much-criticised Inga 3 dam in Democratic Republic of Congo, IFC rumoured to step in
•Concerns raised over Bank funding for dams in East Africa, Niger
•Bank and IFC funding for hydropower projects in Pakistan confirmed
•Proposed Bank funding for Macedonia dam in national park criticised by scientists
•Uruguay buys Bank insurance to protect state hydropower company
•Bank’s “thirsty energy” initiative raises concerns on viability of hydropower
The World Bank has continued its push for hydropower projects (see Bulletin Dec 2013, Observer Autumn 2013, Update 86), including through its private-sector arm, the International Finance Corporation (IFC). After the US appropriations bill in January gave fresh hope for long awaited compensation for the communities affected by atrocities associated with the Chixoy dam in Guatemala (Observer Winter 2014, Update 86, 84), the spotlight has turned to the IFC’s involvement in another controversial dam through a financial intermediary, linked to human rights violations of indigenous communities (see Bulletin Dec 2013, Update 86, 84). In a February open statement, the Guatemalan NGO Departmental Assembly of Huehuetenango (ADH) referred to a five-year conflict over two hydroelectric projects on the Cambalam river being built by Hidro Santa Cruz, a subsidiary of Spanish company Hidralia Energía, resulting in “persecution, intimidation, and co-option of community leaders. There have been assassinations, imprisonment; there is fear and terror.”
The statement alleged: “The sad and terrifying story of Chixoy is related to the current persecution … through international financial institutions”, the World Bank and the Inter-American Development Bank. In 2008 the IFC provided $20 million in loans and invested $9.9 million in equity in Corporación Interamericana para el Financiamiento de Infraestructura (CIFI), “a nonbank financial institution that funds small and midsize infrastructure projects in Latin America and the Caribbean”. CIFI in turn invested in Hidro Santa Cruz and the Cambalam project in 2010, with “a long term loan of up to $8.2 million, and a mezzanine facility of up to $2.5 million.” The NGO statement included a call for: “The governments of Europe, Canada and Latin America to investigate and make a public statement against the improper use given to funds provided by the World Bank and Inter-American Development Bank.”
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