World Bank Board Approves Panel Recommendation to Defer Investigation Decision in Uganda Kalagala Case

​The World Bank Board of Executive Directors on April 4, 2017, approved the Inspection Panel’s recommendation to defer by up to 12 months its decision on whether an investigation is warranted into two projects regarding the Kalagala Offset Area (KOA) in Uganda. The Panel received a pair of complaints in 2016 related to the Private Power Generation (Bujagali) Project, the Water Management and Development Project, and the Energy for Rural Transformation Phase III Project. The Board supported the Panel’s recommendation to defer its investigation decision relating to the water management and energy projects, but found that the Bujagali guarantee project was not eligible to be investigated because the project is closed.

The complainants, who asked for confidentiality, raised concerns about potential social and environmental harm caused by the construction of the Isimba Dam reservoir and the consequent flooding of the Kalagala Offset Area. While the World Bank is not financing the dam, the complainants alleged the flooding will undermine the management of protected natural resources in the KOA, which is a requirement of an indemnity agreement between the International Development Association and the government of Uganda as part of the Bujagali project. The Panel registered both complaints in September 2016, and informed the Board that since they raised similar issues the Panel would process them jointly.

As part of its due diligence, the Panel met with Bank management to better understand the projects and their status, and spoke with the complainants on different occasions to learn more about their concerns. The Panel was told that Bank management is preparing an Environmental and Social Impact Assessment (ESIA) addendum, which is expected to be completed by mid-2017 and is intended to address the impacts of the Isimba Dam on the KOA and the resulting mitigation measures that might be needed. The Panel said deferring its decision on whether to recommend an investigation for up to a year would allow it to wait for the completion of the ESIA addendum and follow-up actions by the Bank. For more information and panel reports visit thecase page.