Power dam plan thrown into doubt as bank pulls out
Fisherman on Lake Turkana. The Gibe 3 dam would lead to the ecological and economic collapse around Lake Turkana and would increase conflicts in this volatile region. /William Oeri
Financing for a mega power dam on the Ethiopian River Omo that drains into Kenya’s Lake Turkana now looks uncertain following reports that one of the key targeted financiers, the European Investment Bank (EIB), had opted out of talks with the project planners.
The development came even as a meeting scheduled for next week in Nairobi between the EIB and a lobby group opposed to the project — Friends of Lake Turkana — was called off in the eleventh hour.
“Today, the head of the EIB complaints office cancelled the meeting and informed the group that the Bank’s President had decided not to fund the project,” the lobby said in a statement.
Business Daily could not immediately establish the authenticity of these claims by the lobby group.
But should it emerge that the EIB had indeed turned its back on the Gibe 3 dam project, then the fate of the financing arrangement for the 1.55 billion euros dam project would sealed because EIB and another targeted financier — the World Bank, have in the past both showed reluctance to get involved because the Ethiopian government broke international and domestic transparency rules by directly handing the job tender to Italian civil engineering giant Salini Costruttori.
The African Development Bank (AfDB) is the other financier being eyed by the Ethiopian government.
The project has kicked up a storm because of the potential threats it poses to the environment.
“The Gibe 3 dam would lead to the ecological and economic collapse around Lake Turkana and would increase conflicts in this volatile region. The decision by the EIB President confirms that the dam cannot be built in line with international standards.” Ikal Agelei the lobby’s coordinator said.
According to the architectural design, the walls of Gibe 3 would rise to a height of 240 meters, holding back a reservoir 150 kilometres long, making it Africa’s tallest dam and Ethiopia’s biggest investment project so far.
The dam is anticipated to provide 1,800 megawatts of electricity on completion, a development that would more than double Ethiopia’s current generating capacity and according to Prime Minister Meles Zenawi, solve a national energy crisis.
But even as landing financing deals remained uncertain, the Ethiopian government may focus its hopes on the Italian government that it has already approached to provide funds for the project.
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