Global Policy Forum

The World Bank has voted to approve funding credit for a major transmission line that would link Kenya to the controversial Gilgel Gibe III dam site in southern Ethiopia, pushing back against months of calls by local and international rights and environmental groups to keep out of the project.

For many observers, the move, announced Thursday, is complicated by the fact that the bank has already refused to fund the Gibe III dam itself, citing a lack of transparency. The African Development Bank and the European Investment Bank have similarly pulled out, although the project is going forward due to backing by the Industrial and Commercial Bank of China.

“For us, the World Bank’s double standards are unacceptable,” Ikal Angelei, from Friends of Lake Turkana, a group of local communities that would be affected by the dam, told IPS.

“If the dam did not meet standards earlier, how can they fund what is produced by the dam?” he asked, calling Thursday’s news a “blow” to local communities.

Others have accused the World Bank of turning a blind eye to accusations of abuse and environmental concerns surrounding Gibe III in order to be able to fund the transmission line, for which the bank is offering 684 million dollars.

“Under its own safeguard policies, the bank is obligated to apply its policies not only to the direct area but also to associated facilities,” Jessica Evans, a senior researcher for Human Rights Watch, told IPS.

“To do this, it must undertake its own due diligence to determine potential power sources and apply their safeguards to the main power sources – and Gibe III is, according to the bank, one of the power sources.” 

Construction on the dam, which is on the Omo River and at around 240 metres would be Africa’s highest dam, has gone on since 2006, overseen by an Italian company. It is currently about halfway complete and is tentatively expected to be completed by 2014, while the transmission line could be up and running by 2018.

The benefits of Gibe III, and its downsides

When completed, the installation should produce around 1,870 megawatts of electricity, increasing Ethiopia’s production capacity so significantly that the country will not be able to use all of the energy generated.

The newly approved 1,000-kilometre transmission line, while meant to service several power projects, will thus be a critical component of Gibe III, allowing Ethiopia to sell the power to its neighbours, particularly power-strapped Kenya. Proponents say the project will do much to bring affordable power to broad swathes of populations throughout of East Africa that currently lack electricity.

Yet the Gibe III project has run into longstanding and widespread opposition, including even from those who could benefit from its electricity. Critics have warned that insufficient attention has been given to fears of the dam’s environmental and social impacts.

In 2011, the Kenyan Parliament passed a resolution urging the government to demand that the project be shelved pending additional investigation.

The same year, the U.N.’s World Heritage Committee noted its “utmost concern” over the dam’s potential impact on the downstream Lake Turkana, which is surrounded by lands protected as World Heritage sites. The committee urged Ethiopia “to immediately halt all construction on the Gibe III dam”.

Survival International, an advocacy group for tribal communities worldwide, has warned that the dam’s impact on the Omo River’s seasonal flooding would threaten up to 200,000 people in Ethiopia and Kenya as “subsistence economies … collapse”.

Despite these concerns, Ethiopian Prime Minister Meles Zenawi has made construction of Gibe III an issue of both national and personal pride, stating that he would see the project through “at any cost”.

Circuitous funding?

To be clear, few observers are accusing the World Bank of direct involvement in the displacement of indigenous communities, the negative impacts on fragile ecosystems, or the other points of criticism that have been levelled at the Ethiopian government’s handling of the Gibe III construction.

Rather, the issue at stake is whether the bank can be seen to have done due diligence on a transmission line that will, in the end, comprise a critical component of the overall feasibility of a highly contentious project.

On Friday, in a collective release, five international civil society groups warned that the bank is “lowering its standards” by backing the transmission project without first addressing the criticism surrounding Gibe III.

“Financing the transmission line sends a signal to Ethiopia that it can ignore massive impacts of damming its rivers, and still get rewarded,” Joshua Klemm, Africa manager of the Bank Information Centre, a World Bank watchdog based here in Washington, said in the statement.

Bank officials, meanwhile, see the transmission line as the first step in a much broader plan to interconnect the electrical grids of East Africa. Estimated to cost around 1.3 billion dollars, the so-called Eastern Electricity Highway Project is aimed at benefitting some 212 million people in five countries.

The transmission line would eventually be used for several current and future power plants in Ethiopia, in line with the government’s plans to expand Ethiopian production to 37,000 megawatts – still below the country’s estimated hydropower potential of 45,000 megawatts, according to the bank.

“While it is true that Gibe III will contribute energy to the national grid, our analyses show that the interconnector line would be economically viable without Gibe III,” a World Bank spokesperson told IPS.

“Ethiopia will benefit through the sale of energy to Kenya, which faces severe power shortages, and is among the five African countries considered likely to achieve middle-income status in the next decade, provided it can grow at six percent annually, significantly expand its electricity supply and improve its transport links.”

In addition, the transmission line’s flow is bidirectional, allowing Ethiopia to import energy as required. The bank suggests that such infrastructure flexibility will increase the involved countries’ resilience in the face of future climate change-related uncertainty.

“Inter-country power sharing is vital for energy security, reducing energy costs, promoting sustainable and renewable power generation, and better protecting the region’s environment,” the bank spokesperson said, “thereby paving the way for more dynamic regional cooperation between the countries of East Africa.

Currently, the bank says, only about a third of Africans have access to electricity, including just a quarter of Ethiopians.