Submitted November 22, 2001.

Ssempala scrambles to save dam project

By Carl Bialik

New York -- Edith Ssempala, Uganda’s ambassador to the United States, has been scrambling for the last week to secure approval for the Bujagali Falls hydroelectric dam project. The World Bank is set to decide on final approval on December 13.

The project has been in discussion for seven years, and it has been held up repeatedly because of environmental concerns. An Inspection Panel is working to investigate environmental issues related to the project concurrently with the Board’s deliberation.

AES Nile Power, which was set to fund the project, has threatened to pull out because of the delays, The Monitor reported Tuesday.

World Bank approval is necessary to secure financing from the International Finance Corporation (IFC), an arm of the Bank that deals with private sector investment credit. This financing is crucial on its own, and its provision will provide a vote of confidence for other investors considering financing the AES project.

So Ssempala has met with AES officials to placate their concerns. "AES has assured us of their commitment," she said. "We have been working very hard together."

However, there are some troubling indications. Ssempala acknowledged that AES and Uganda are "anxious," and that AES has met difficulties because of the project delays. AES officials could not be reached for comment.

"They are not in the charity business," Ssempala said of AES. "They are in the business of implementing their projects so that they can get returns. So if they can’t, there are other countries that are looking for investments in the power sector."

To prevent AES from dropping the project, Ssempala has also been meeting with World Bank executive directors. "They really do have sympathy for Uganda’s energy needs," Ssempala said of these executive directors, "but they also get, very often, caught up with these international NGOs."

Ssempala said that some of these international NGOs which have held up the project are too focused on narrow goals. "Some don’t like dams, per se," she said.

However, Ssempala made a powerful rebuttal to the environmental concerns raised. "The first challenge to our environment is poverty," she said. "Poverty leads to cutting down trees for firewood, which leads to soil erosion."

And she argued that the energy supplied by the dam would reduce poverty, aid development, and encourage investment, as well as fill vital needs in health and education.

"I definitely think it is going to pass," Ssempala said, predicting success for the project at the Board meeting next month. "I think logic is prevailing."

Copyright © 2002 Carl Bialik


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