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World Bank Board of Executive Directors approves investigation of the UGANDA: Private Power Generation Project (Bujagali)

World Bank Board of Executive Directors approves investigation of the UGANDA: Private Power Generation Project (Bujagali)

On May 18, 2007, the World Bank Board of Executive Directors approved, on a non-objection basis, the Inspection Panel’s recommendation to investigate the issues raised in the Request for Inspection related to the Uganda Private Power Generation Project, which provides for the construction of the Bujagali hydropower plant.

The Panel received the Request for Inspection on March 5, 2007. The Request was submitted by the Ugandan National Association of Professional Environmentalists (NAPE) and other local organizations and individuals, who raised various sets of concerns related to Project’s hydrological risks, cumulative impact assessment and climate change; Kalagala Falls “offsets”; Project’s economic analysis, options, and affordability assessment; information disclosure, transparency and openness regarding the Project; dam safety; indigenous peoples, cultural and spiritual issues; compensation, resettlement and consultations; and terrestrial and aquatic fauna. They claim that the Bank has violated a number of its operational policies and procedures and, as a result, the Project will cause harm to the people of Uganda and to the environment because it is based on flawed assumptions and data that have little or no bearing to the current situation.

The Project provides for the construction of the Bujagali hydropower plant with an installed capacity of 250MW, on Dumbbell Island on the Nile River, about 8km downstream from the existing Nalubaale and Kiira Hydropower Plants. Bujagali Energy Ltd. (BEL) is responsible for financing, constructing and operating the power plant. The Project is supported, inter alia, by an International Development Association Guarantee of up to US$115 million, approved by Board of Executive Directors on April 26, 2007, for payment of interest and repayment of the principal amount of a loan to BEL.

After reviewing the Request for Inspection and Bank Management Response to the Request and visiting the Project area, the Panel determined that the Request and the Requesters satisfied the eligibility criteria for an inspection and that conflicting claims and assertions expressed by the Requesters and Management merited an investigation. The Panel therefore recommended that the Board of Executive Directors authorize an investigation into the matters alleged in the Request. The Board approved the Panel’s recommendation.

The Panel’s Report and Recommendation, the Request for Inspection and the Management Response are available in the Panel’s website atwww.inspectionpanel.org. For additional information about the Inspection Panel, please contact the Panel’s Secretariat atipanel@worldbank.org or at Tel. 1 202 458 5200.