BRUSSELS – A report that the European Investment Bank (EIB) has withdrawn funding from Ethiopia’s Gibe 3 dam project is misleading as the Bank has never financed the dam in the first place, EIB said in a statement Saturday.
To begin with, no decision has ever been made whether the Gibe 3 dam project – Ethiopia’s largest capable to generate 1870 MW of power – is worth financing, the bank said, discrediting a news report circulated by Afrol news agency.
“Following the recent publication of erroneous information regarding the alleged European Investment Bank decision not to finance the Gibe 3 project in Ethiopia, the EIB would like to confirm that, as of today, the Bank has not taken any formal decision on whether to undertake an appraisal of this project,” EIB said.
However, the Bank admitted the existence of controversies surrounding the Gilgel Gibe 3 project, and said it requires further studies before getting involved.
The Gibe 3 dam project has come under fire from mainly environmentalists who warn that the 240-meter-high dam – the tallest in the world – would devastate the ecosystem south of the Omo River up to Lake Turkana in Kenya.
The government in Ethiopia drew the skeptical eyes of corruption watchers when, without international tendering, awarded the contract in 2006 directly to the Italian construction company Salini (which also built Gibe I and II previously) in the same fashion.
European Bank withdraws funding from Ethiopia Gibe 3 dam project: Afrol
European Investment Bank has decided to pull back its funding for Ethiopia’s hydropower dam following pressure calls by environmentalists that the Gibe 3 Dam threatens the food security and local economies that support more than half a million people in Southwest Ethiopia.
According to the banks statement, the Euro 1.55 billion hydropower dam would devastate the ecosystems of Ethiopia’s Lower Omo Valley and Kenya’s Lake Turkana.
The dam which is expected to be Africa’s tallest dam with the height of 240 meters and Ethiopia’s biggest investment, drew criticisms from environmentalists saying the construction will wreak havoc on the Omo River’s natural flood cycle.
The Bank’s statement further said in March 2009, Friends of Lake Turkana, a group of affected people in Kenya, urged the EIB not to fund the Gibe 3 because the affected communities could not withstand any more pressure on the little resources along the lake.
The coordinator of Friends of Lake Turkana, Ikal Angelei, said Gibe 3 Dam would lead to the ecological and economic collapse around Lake Turkana, adding that it would also fuel tension in the volatile east African region.
The African Development Bank will be the next financier to consider funding for the project. Friends of Lake Turkana and International Rivers Network submitted complaints to the AfDB in March and April.
International Rivers’ Africa director Terri Hathaway said the Gibe 3 Dam violates the AfDB’s policies on environmental and social assessment, poverty reduction, resettlement, public disclosure, and trans-boundary water management.
“Donors should not fund through the AfDB what they are not prepared to fund through the EIB,” the official said.
The Gibe 3 Dam which resumed construction in 2006 was awarded without competition to an Italian construction giant Salini, raising serious questions about the project’s integrity. The project’s impact assessment reports were also published long after construction began and are said to disregard the project’s most serious consequences.
The European Investment Bank financed the Gibe and Gibe 2 dams, conducted a pre-assessment of the Gibe 3 Dam, and contribued funds to the project’s Economic, Financial and Technical Assessment.
The environmentalists have argued that the construction of Gibe 3 dam would leave the Lake Turkana and its inhabitants devastated as the lake could start drying up when its main source, the Omo River, is depleted by a huge dam in Ethiopia.
“There is no question that Ethiopia needs power. But the irony of the Gibe III dam is that while it threatens the economy of the Turkana region, a large share of its electricity will be sold to consumers in other parts of Kenya,” the environmentalists has said.
Although Kenya and Ethiopia have reportedly signed the power purchase agreement outlining the terms of electricity sales in 2006, no bilateral agreements on the use of the Omo-Turkana waterway and the dam’s downstream effects to Kenya are publicly known.
