Tuesday, May 31, 2011

China's backing for Ethiopia dam riles activists

China's backing for Ethiopia dam riles activists
CBS News, May 31, 2011 8:03 AM
By Celia Hatton

It's a story that truly spans the globe: Activists from all over the
world, including San Francisco, are trying to stop the construction of a
dam in Ethiopia financed by a Chinese bank.

The Gibe 3 Dam is in the early phases of construction on Ethiopia's
powerful Omo River, using $500 million dollars in equipment funded by
the Industrial and Commercial Bank of China (ICBC). The hydroelectric
dam, one of the largest construction projects in Ethiopia's history,
would regulate the flow of water along the Omo River as it courses
through Ethiopia and into Kenya's massive Lake Turkhana -- a freshwater
oasis in the heart of the desert.

The project has been mired in controversy since it was just a blueprint.
The World Bank and the European Investment Bank financed smaller
hydroelectric projects on the Omo River, but dropped consideration of
the Gibe 3 Dam after viewing the environmental impact report
commissioned by the Ethiopian government. Activists say the banks were
scared away by the Ethiopian government's lack of transparency regarding
construction plans and the fact that the Gibe 3 will have a profound
ecological impact on the region's fragile ecosystem, from Ethiopia into

A November 2010 hydrology report by the African Development Bank (AfDB)
noted that the Omo River is responsible for 90 percent of the water
leading into Lake Turkhana. A major dam blocking the river would drain
most of the lake, depriving 300,000 Kenyans of the water needed for
agriculture, cattle herding and fishing. And that's just the first
concern: The activists' extended list of fears about the dam seems as
long as the Omo River itself.

Any changes to the Omo River's natural flood pattern could affect 70
percent of the "more important" species living around Lake Turkhana,
according to the AfDB report. Also, in the long term, independent
Ethiopian engineers have questioned the wisdom of building such a large
dam in a region with a history of strong earthquakes.

That's not all. The area that will be flooded by the dam is home to
low-level farmlands used by 300,000 Ethiopians. Food resources are
already so scarce in the drought-hit border region between Kenya and
Ethiopia that two of the main ethnic groups living there have resorted
to violence in their bid for more land and water. In May, 70 ethnic
Turkhana people from Kenya were killed when they attempted to buy food
across the border in Ethiopia.

Landlocked Ethiopia is starved for electricity and also hopes to boost
its revenue by exporting hydroelectricity. One section of the Kenyan
government has already signed a Memorandum of Understanding to buy
hydropower from the Gibe 3 dam. In a fax to CBS, the ICBC noted
"relevant nations expressed interest in buying electricity from Ethiopia."

However, Friends of Lake Turkhana, an activist group battling the dam,
is taking the Kenyan government to court to fight the agreement to buy
electricity without conducting a full environmental impact assessment on
the dam. Now that the ICBC bank in China is offering financial support
for the dam, the Kenyan opponents to the dam are widening their campaign
to stop construction of the Gibe 3.

The ICBC Bank has long been silent on its reasons for supporting
controversial Gibe 3 Dam, until now. Activists from Kenya and
International Rivers flew to Beijing to plea their case to the ICBC, but
their meeting requests were ignored. So, I contacted ICBC Bank to ask
about the widespread concerns regarding ecological and safety risks of
building the GIBE 3 Dam. Days later, the unsigned letter from ICBC faxed
to CBS News insisted, "credit and loan for all projects conforms to
environmental requirements."

Further, the bank argues that other, smaller hydro projects on the Omo
River, Gibe 1 and Gibe 2, were supported by the World Bank, the European
Investment Bank and other financial institutions. The fax did not answer
CBS News' question as to why the ICBC continues to support the Gibe 3
project when other financial institutions have stepped away.

The ICBC's annual general meeting begins Tuesday in Beijing and Hong Kong.

"Based on the serious findings of the [African Development Bank]
hydrological impact report, which has now been published, ICBC should
reconsider their funding of the Gibe 3 Dam," Peter Bosshard, Policy
Director at International Rivers tells CBS News.

The Chinese government is pressuring the country's state-owned banks to
invest in more projects outside of China. As Chinese banks extend their
interests into international territory, activists from all over the
world will likely find themselves spending more time in Beijing.

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