Wednesday, August 31, 2011

For development, China moves millions

For development, China moves millions
By Kathleen E. McLaughlin
August 29, 2011
Global Post

For a video and slideshow related to the article, see:

CHONGQING, China � When China launches ambitious projects to conquer
nature and astound the world, people always get in the way.

Sometimes it's a few dozen people; often it's thousands or even millions.

In the country's headlong drive toward development, moving large numbers
of people quickly and often painfully goes hand in hand with building
the world's biggest dam, the longest stretch of high-speed rail, even
re-shaping whole cities.

In the best-case situations, those who get moved end up with nicer
homes, indoor plumbing, access to services and cleaner living
conditions. The dark side is that frequently the relocated become
internal migrants mired in debt, without farmland or income.

"Eventually, every forced migrant in China becomes a refugee," said Chen
Zongshun, author of an investigative book about the 1.5 million people
relocated for the world's biggest hydropower project, the Three Gorges
Dam on the Yangtze River.

"They're trampling on me. But I'm tough, I can still move a little
with them trampling."

~Three Gorges migrant who now lives in Beijing

A study this spring says demolition and forced relocation are the
biggest flashpoints for social unrest in China, even more than toxic
pollution or labor issues. With an estimated more than 180,000 protests
per year in China, that's certainly not lost on a government that now
spends more on domestic security than its military budget.

Perhaps this level of unrest shouldn't be a surprise when one considers
just how many people have been moved, and lost farms and families in the
process, with little or no recourse. Thousands of them flock to Beijing
every year, seeking redress for lost homes and farmland, often forced
back to the provinces with nothing, or having spent a few days in jail.
Even those thousands displaced for the destruction of old parts of
Beijing had troubles.

�Spike point'

In June, official media reported on a study from the Research Center for
Social Contradiction, which called forced demolition and relocations "a
spike point among all conflicts in Chinese society."

This year, China is embarking on its biggest relocation yet: A project
to move nearly 3 million people in central Shaanxi province in part to
get people out of dangerous, crumbling mountains but also to help divert
the Yangtze River north.

It's also continuing a plan to move nearly 400,000 nomads in Ningxia to
cities. Both are billed as alleviating poverty through urbanization. If
history is any guide, there will be problems.

From Beijing to Xinjiang and Shanghai to Yunnan, China's methods of
moving people out of the way for demolition, construction and
development are remarkably similar. They start with logical, seemingly
fair plans for moving and compensation; plans that often break down by
the time the details are implemented on the local level.

Probably the best-known example of this collapse is the resettlement
river town dwellers moved to make way for the Three Gorges Dam on the
Yangtze River, mostly during the 1990s. Here, families who had farmed
and fished for generations were turned almost overnight into city
dwellers, many of them given new homes in provinces thousands of miles
from their hometowns.

Initially, some resettled farmers could be found along the river happy
about getting newer, nicer homes mostly paid for by the government. The
system broke down quickly, however, and vast sums of the money meant to
re-home people whose farms and houses were flooded was embezzled by
government officials. By the end of the resettlement project, complaints
and petitioners were everywhere.

The writer Chen estimates from his research that nearly one-third of
Three Gorges migrants have left their new homes, most of them returning
to Chongqing and the river areas.

Returning home

Computer tech Chen Liang was 17 when his family was moved from the Three
Gorges area to a city on China's east coast, nearly 500 miles away. Now
24, he's a quasi-legal migrant worker back in the river town where he
grew up. He finished high school in his adopted town, but couldn't wait
to get back to Chongqing and left as soon as he was old enough. His
family, once farmers on the Yangtze, is now spread across the country.

"Nobody really wanted to move from the Three Gorges area. This was
always our home," Chen says. "We already had houses and were told we had
to spend our own money and buy new houses. Nobody wanted it."

Officially, Chen is a registered resident of Jiangsu province. But like
many thousands of Three Gorges migrants, he lives and works back near
his roots around Chongqing.

In May, Beijing took the huge step of admitting there are "major
problems" with how the dam was executed, including problems with the
resettlement of those known as "Three Gorges migrants." Because the
massive dam and reservoir so unsettled the earth, the government now
says it will need to move nearly half-a-million more people out of
harm's way.

The big-show propaganda days of the Three Gorges resettlement are long
gone, however, and those who need to be moved now, in this last wave,
are waiting and going into debt.

Failed cities

In Yunyang, which has been labeled by some Chinese media as a "failed
relocation city," 37-year-old Guan Xiaonian thought he had escaped the
fate of Three Gorges migrants. His family farm was high on a mountain,
in no danger of flooding.

This spring, a landslide tore away part of the home, rendering the place
unlivable. His five-member family now rents an apartment in town, paying
cash out-of-pocket. Guan says he's been promised a few thousand dollars
in resettlement funds from the local government, but the money won't
come until his house is finished and it will take him five years to earn
enough to meet that goal. The government compensation covers less than
one-seventh of the price of buying a new, safe place.
Tens of Dachang residents squat in make shift housing amid the rubble of
their former homes, they say they haven't been properly compensated and
are too poor to move. (Sharron Lovell/GlobalPost)

Here at the western end of Three Gorges reservoir, people like Guan are
called "mountain migrants," as opposed to the "dam migrants." He says
the mountain migrants � those half-million needing to move because of
dam-related landslides � are in a doubly difficult situation.

"Our situation is worse because we can't afford to buy anything, no
matter what," says Guan, explaining that housing inflation has priced
mountain migrants out of the market.

During the Three Gorges relocation, tiny Dachang village gained a
national reputation for fighting the project. It demanded fair
compensation for villagers who lost homes, and village leaders spent
time in jail for their defiance toward higher officials.

Even today, years after old Dachang was submerged under the Yangtze, its
best-known dissenters remain under heavy scrutiny. One man who lost his
dock and his fortune in the relocation mess had to cancel a planned
meeting with GlobalPost in Dachang because he was warned the day before
against talking to foreign journalists.

Far from home

So far-flung are the Three Gorges migrants that many have ended up doing
seasonal and temporary labor in places like Beijing.

One migrant, who didn't want his name used for fear of retribution,
initially came to Beijing to beg for help from the central government.
He's ended up living here for years, earning money on piecemeal jobs as
a migrant worker. He's also done several stints in jail and says he
can't get a government ID for his 7-year-old daughter. It's a crucial
document that will allow her to attend school and receive other critical
services. He thinks it's retribution, but he also thinks he'll get by.

"They're trampling on me," said the man. "But I'm tough, I can still
move a little with them trampling."

That seems to be the overwhelming attitude across Chongqing among Three
Gorges migrants. Many of those who complained and got in trouble a
decade ago are old or dead; many others have been silenced.

In new towns like Yunyang, Wuxi and Wanzhou, all cities contained within
the megalopolis of Chongqing, development, and life, move on.

You received this message as a subscriber on the list:

To be removed from the list, please visit:

Tuesday, August 30, 2011

$1.6b Chinese loan for West Seti Hydel Project

$1.6b Chinese loan for West Seti Hydel Project
August 30, 2011

KATHMANDU, Aug. 30 -- China has agreed to provide loan worth $1.6
billion for the much talked about West Seti Hydropower Project. The
northern neighbour is investing in Nepal's hydropower sector for the
second time after Upper Trishuli 3A.

Outgoing Energy Minister Gokarna Bista said Beijing has agreed the loan
for the 750 MW project. :We could have signed a memorandum of
understanding (MoU) with China Exim Bank for the project had our
government stayed a bit longer," said Bista.

After estimating financial capabilities of interested countries, the
government has concluded that only China can build this project. The
Chinese government, through the China Exim Bank, has already provided
loans worth around Rs 9 billion for the 60 MW Upper Trishuli 3A.

Following the annulment of West Seti's licence on July 28, the
government had said that it would build the project itself. The project
had acquired the licence 16 years ago.

The government had made a formal request to China for financing West
Seti during the recent Nepal visit of the 60-member Chinese delegation
led by Zhou Yongkang, a powerful member of the Standing Committee of
Chinese Communist Party (CPC). The Chinese side had told Nepal to send
the Detailed Project Report to China.

Energy Secretary Balananda Poudel said Nepal had requested China to
provide the entire amount ($1.6 billion) as concessional loan. "However,
China has said that the loan amount will be a combination of soft and
commercial loan," said Poudel.

Earlier, the China Exim Bank had said the interest rate on commercial
loan would be at seven percent. Now, Poudel says the rate will be below
five percent.

Following the termination of West Seti's licence, the Ministry for
Energy had suggested three options to the government for the
construction of the project. "We'd asked the government either to build
on its own or find a loan for the project," said Poudel. "The third
option was to call a global tender."

Chinese interest in West Seti is not new. Earlier this year, China Three
Gorges Corporation (CTGC), operator of the Three Gorges Project (21,000
MW) had written to the Prime Minister's Office expressing its interest
to invest in the West Seti Project. The CTGC had also offered its help
in getting funds from the Chinese government for the project.

The project located in Doti and Dadeldhura districts is seen as the key
project or the industrialisation of the Far-West Region. Energy Ministry
says it is yet to decide on the modality for construction of the
project. "It can be built either by forming a committee or by Nepal
Electricity Authority," said Bista.

West Seti was originally designed as an export-oriented with 90 percent
of the power to be exported to India. However, promoter WSHPL failed to
move ahead with the construction that was estimated to cost Rs 120
billion. WSHPL, after failing to manage resources, had proposed
developing the project under the Public Private Partnership (PPP) model,
in January, 2011. The company had filed an application at the Department
of Electricity Development (DoED) seeking extension of the deadline for
financial closure and also sought the government's involvement in the

WSHPL had signed an agreement with the government 16 years ago to
construct the project under the Built-Own-Operate-Transfer (BOOT) model.
Australia's Snowy Mountains Energy Corporation (SMEC) was the major
promoter of the project. The project received a major jolt when the main
promoter SMEC stopped sending funds for office operations in August
2010. SMEC's decision to stop funding was linked to the lack of interest
shown by China National Machinery and Equipment Import and Export
Corporation (CMEC) and Asian Development Bank (ADB) to pour in money in
the mega project. SMEC, as the major promoter, has invested over $ 31
million in the project over the last decade. Published by HT Syndication
with permission from For any query with respect to this
article or any other content requirement, please contact Editor at

This is International Rivers' mailing list on China's global footprint, and particularly Chinese investment in
international dam projects.

You received this message as a subscriber on the list:

To be removed from the list, please visit:

China signs to finance massive hydroelectric dam in Guinea

China signs to finance massive hydroelectric dam in Guinea
Conakry, Guinea --- ESI-AFRICA.COM --- 15 August 2011

The Government of Guinea and the China International Water & Electric
Corporation have signed an agreement for the construction of a US$526
million hydroelectric dam in the West African country.

Guinea will contribute 25% of the funding for the project, which will be
situated about 150km northeast of the capital, and China International
Water & Electric the rest, according to the agreement signed here.

The new Kaleta dam will have a capacity of 240.5MW, Guinea's energy
minister Papa Koly Kourouma said during the signing ceremony.
Construction would begin by December and last 48 months, he added.

This is International Rivers' mailing list on China's global footprint, and particularly Chinese investment in
international dam projects.

You received this message as a subscriber on the list:

To be removed from the list, please visit:

Drought dries up reservoirs, rivers in SW China

Drought dries up reservoirs, rivers in SW China
China Daily, 2011-08-25 16:06

GUIYANG - A severe drought in Southwest China has dried up hundreds of
reservoirs and rivers, devastated farm fields and made drinking water
scarce, local authorities said.

The drought, which has lasted since early July, has dried up 479
reservoirs and 349 rivers in Guizhou province, the provincial flood
control and drought relief headquarters said in a statement on Thursday.

The drought has plagued 86 of the province's 88 cities and counties as
last month's total rainfall was 69.8-percent below average, leaving over
5.5 million people short of drinking water, according to the headquarters.

The headquarters said earlier that rainfall in August was also below

As of Thursday, nearly 1.1 million hectares of crops have been affected
by the drought and 2.78 million heads of livestock were suffering from
the drinking water shortage.

Many parts of the province have embraced this week's rainfall, but,
according to the statement, it did not rain long enough to ease the drought.

The State Flood Control and Drought Relief Headquarters on Wednesday
sent work teams to Guizhou, as well as the other drought-ravaged
southern provinces of Yunnan, Hunan, Sichuan and Chongqing municipality,
to assist in drought-relief operations.

According to the provincial headquarters' statement, Guizhou has
allocated 640 million yuan (about $200 million) in drought relief.

Meanwhile, the province's water resource departments have been drilling
wells and pumping water out of the ground to ensure a supply of drinking
water and save crops, it said.

You received this message as a subscriber on the list:

To be removed from the list, please visit:

Monday, August 29, 2011

Uganda: Save Mabira forest

The Ugandan president wants to turn a protected forest into a sugar
plantation. Enviros and the World Bank and many MPs are fighting the
proposal. Two articles below. The forest was gazetted for protection
as part of the mitigation for Bujagali Dam on the Nile. It also
protects the dam's watershed.

Please sign a petition on this, hosted by the Ugandan group NAPE:

> World Bank wants Mabira kept intact Monday, 29th August, 2011

THE World Bank has written to the Government demanding commitment on
the agreement on promoting the conservation of Mabira Forest Reserve
for posterity.

The 2001 agreement ties down Mabira to conservation and was designed
as part of the mitigation measures to address the negative impacts of
building a hydro-electricity power dam at Bujagali.

Two weeks ago, President Yoweri Museveni said part of Mabira Forest
Reserve be allocated to Sugar Corporation of Lugazi (SCOUL) to expand
their sugar cane plantation.

This has resurrected the Mabira giveaway that was shelved four years
ago, following a demonstration in which an Indian national perished.
SCOUL is owned by Ugandan investors of Indian origin.

�We are in contact with our main interlocutor in Government - the
Minister of Finance, Planning and Economic Development - to seek
further clarification,� Steven Shalita, a senior communications
specialist at the World Bank, stated in a communication on August 19.

He said the Bank was not formally informed of the Government�s plan
to give away part of the forest.


Uganda resurrects plan to hand over protected forest to sugar company
Jeremy Hance
August 22, 2011

An environmental issue in Uganda that left three people dead four
years ago has reared its head again. The Ugandan government has
resurrected plans to give a quarter of the Mabira Forest Reserve to a
sugar cane corporation after dropping the idea in 2007 following large-
scale protests, including one that left many activists injured and
three dead. A pet project of Ugandan President Yoweri Museveni the
plan would degazette 7,100 hectares of the 30,000 hectare Mabira
Forest Reserve for a sugarcane plantation to be run by the Indian-
owned company, Mehta Group. However the plan is being heavily attacked
by critics.

"All Ugandan's [...] know the economic, ecological, social and other
values of Mabira Forest Reserve. Each one of us who has attended
Primary school get to know Mabira Forest Reserve as one of our
Nation's heritage at the heart of Buganda Kingdom and Uganda," read a
statement from Ugandan civil societies that oppose the plan.

Located in the southern Uganda district of Buikwe, Mabira forest has
been under protection since 1932. The reserve is home to 312 species
of tree, 287 species of bird, and 199 species of butterfly. In
addition, the Ugandan gray-cheeked mangabey (Lophocebus ugandae), a
monkey endemic to Uganda, has one of its most important populations in

According to critics of the plan, converting part of the rainforest
not only threatens important species, but could also imperil rainfall,
which is already declining in the area, and worsen soil erosion.
Burgeoning tourism efforts as well could take a hit. According to the
Ugandan civil societies, 60 percent of tourists who visit a forest
reserve in Uganda stop in Mabira.

To attempt to defuse the issue, MP Simon Wananzofu, has offered over
twice as much land for a sugar cane plantation under Mehta in a non
forested area.

"Mr President, there is a lot of outcry over Mabira, we don't want
you to die of pressure from the opposition. We have 50,000 acres of
fertile land and we have given it to you to save Mabira. Tell the
Indian sugar investors to come and start growing sugarcanes here,"
Wananzofu said as reported by the Daily Mirror.

However, President Museveni said he would take the offered land for
sugarcane—and Mabira forest as well.

Buganda Kingdom, an administrative district and historic kingdom in
central Uganda, has also offered land only to be turned away.

While the Ugandan government has argued that the sugarcane plantation
is necessary for jobs and development, a new study in Proceedings of
the National Academy of Sciences has found that living next to a
protected area actually improved the lives of poor Ugandans. The ten
year study found that communities living adjacent to Kibale National
Park in Uganda generally saw their prosperity—measured by access to
clean water, livestock, and housing quality—improve rather than

Ugandan civil societies argue that the Mabira Forest Reserve
represents a national treasure that is not for any president to give-

"To many of us, the struggle to save Mabira Forest Reserve is much
more than an economic, ecological or emotional struggle. It is about
our present and future as a nation. It is about respect for our
national heritage, our constitution and respect for our environmental
laws. This is why we call upon all Ugandan's of good will to
categorically reject the current maneuvers by the President to
degazette and donate to Mehta part of Mabira Forest Reserve," their
statement reads.

You received this message as a subscriber on the list:

To be removed from the list, please visit:

Thursday, August 25, 2011

Uganda: Invest in Renewable Energy

Uganda: Invest in Renewable Energy
Frederick Ndiwalana

21 August 2011

This week we had to dig deep into our pockets to buy a bag of
charcoal. Our current rate of a bag every two-and-a-half weeks was a
rude reminder that we need to urgently buy liquid petroleum gas and
make good use of the gas cooker, if we are to keep our energy budget
in check.

Charcoal now costs sh45,000 and we were charged another sh3,000 to
have it delivered to our house. The last time I wrote about charcoal
in these pages was in March last year.

At that time, a bag went for sh35,000, up from sh28,000 in a space of
six months. Back then, I had made a prediction that the price of
charcoal would shoot to sh100,000 in a space of six years. However,
going by the current trend, if Ugandans do not invest in renewable
energy, many will have a difficulty cooking food in the next three
years. How can one invest in renewable energy?

Renewable energy comes from natural resources, which can be
replenished. These natural resources include, but are not limited to,
sunlight, wind, geothermal heat, rain and tides, biogas, small hydro
electric generators and biofuels.

Renewable energy is coming to the forefront now because of the urgent
need to conserve the environment. It is estimated that one third of
the global population or more than two billion people use biomass
fuels, mainly firewood, to cook and heat their homes, while a billion
people rely on forests for their livelihoods.

As the world's population continues to grow (Uganda's population
growth rate is over 3% per annum), so does the pressure on natural
resources, including forests. Currently, 12% of the annual global
emissions of carbon dioxide (one of the gases responsible for global
warming and climate change) is due to deforestation. Investing in
renewable energy would, therefore, not only save you money, but also
directly contribute to a cleaner environment and help slowdown global
Whereas investing in renewable energy can be a complex affair
involving buying stocks, investing in mutual funds or companies
considered 'green', such opportunities do not exist in most of the
developing countries, which also have over 56% of the world's forests.
The opportunities for investing in renewable energy in these countries
lie in being able to replace conventional fuels in the areas of
cooking, lighting, heating or pumping water and power generation.


Biogas technology is cheap and easy to access locally, compared to
other energy options.

Solar energy

Africa has some of the regions with the highest solar intensity in the
world. In many parts of Africa, it is easy to get enough sunlight even
for equipment with low conversion capacities. There are basically two
types of equipment that one can invest in. One type converts sunlight
into direct current electricity using photovoltaics, while the other
tracks and concentrates sunlight using reflectors into a single
heating beam.

This kind of technology can be simple, cheap and easy to use. Last
month, Light Gives Heat, a not-for-profit company based in Colorado
US, in partnership with Solar Cookers International, an NGO which has
been promoting solar cooking since 1987, launched a programme which
will enable Ugandans buy solar cookers at only $5.


Windmills have been used by man to harness wind energy for over 2,000
years. A windmill is comprised of vanes and a turbine. The turbine
converts kinetic energy from the wind into mechanical energy. The
mechanical energy can be used to produce electricity, pump water or
drive other machinery. Batteries may be fitted to the turbine to keep
power which can be used when the wind is not blowing. A domestic wind
turbine, which can be mounted on the roof, costs between sh4m and sh7m
and lasts 20 years.
Wind turbines can be a good investment for those who live in open
windy areas or on high ground. A local organisation, Uganda Veterans
Wind Power Initiative, based in Nalukolongo, has the capacity to build
wind power panels that can produce 1,000-15,000 watts of power every

A 1,000-watt wind power, which costs less than sh1m, can power a
fridge, light five bulbs, a radio and TV. A 15,000-watt system can
light up a small village. Going by the number of villages which are
not connected to the national power grid, it is easy to see why you
can save or make millions by investing in renewable energy.

The writer is a development consultant

You received this message as a subscriber on the list:

To be removed from the list, please visit:

Dams gone wrong: Is danger lurking in China’s dams?

Probe International's recently translated an article by Southern Weekend
(Nanfang zhoumo) on July 07, 2011. Southern Weekend is one of China's
preeminent investigative news agencies. In this article, they liken
China's dams to "ticking time bombs," beset by disaster, flaws, poor
construction, neglect, and fraud.

The original article was published on July 7, 2011:

Dams gone wrong: Is danger lurking in China�s dams?
August 24, 2011
By Lu Zongshu and Shen Nianzu

China has built over 87,000 hydro dams, more than any other country in
the world. Hydro dams and reservoirs perform many functions including
flood control, power generation, irrigation, and water supply and so
forth, but the issue of dam safety has always been treated as a
sensitive subject. Now, incidents at a number of dams and reservoirs
have cast doubt on the quality of these projects, but they are rarely
reported to the general public.

Shocking dam incidents

A nation-wide survey focusing on key dams and reservoirs in China will
be carried out, but the authorities have yet to disclose details. Given
the recent debates about whether dams and reservoirs have caused
droughts and floods, this idea is interesting and significant.

The announcement that the survey will be carried out was made at the
2011 Annual Conference of the Chinese National Committee on Large Dams
(CNCLD). Zhang Rushi, Deputy Director of the Work Safety Department of
the Ministry of Water Resources made the announcement and stated that,
through surveys and field investigations, the study aims to discover the
true situation with China's hydro dams.

On June 18, 2011, about three hundred leading experts in China's water
resources and hydropower industry gathered in Yichang, Hubei Province,
to attend the Annual Conference held by the CNCLD. The participants
included Wang Shucheng, former Minister of Water Resources and current
chairman of the CNCLD, and Lu Youmei, member of the Chinese Academy of
Engineering and former general manager of the Three Gorges Corporation.

"Dam safety" was among the most oft-mentioned words by the experts at
the conference. "Safety comes first," insisted Wang Shucheng. "Dam
safety should always be put first in the construction of hydro dams. We
should not be the people who are condemned by history, feeling ashamed
and regretful for what we have done to the motherland and to our people."

During his presentation at the CNCLD meeting, Zhou Jianping, chief
engineer of the China Hydropower Engineering Consulting Group, showed
the audience about ten photos of different dam accidents. These images,
never before disclosed, shocked the general audience, but especially
reporters from the media. Afterwards, reporters from Southern Weekend
did a great deal of research, but could find little detail about the
incidents on the Internet.

The first picture was about the Ertan Hydropower Station built on the
Yalong River (a tributary of the Yangtze, in Sichuan Province), whose
spillway tunnel was completely destroyed by flood waters. For the
general, non-technical audience, like us, it was especially difficult to
imagine how such a solid reinforced concrete structure could be washed
away and broken into pieces like a heap of loose sand. As the speaker,
Zhou Jianping said, it was very fortunate that they found the problem in
time and fixed it, or the Ertan dam would have been seriously threatened.

Another photo caused a buzz in the audience: the flood spillway of the
Sanbanxi dam in Jinping County, in southeast Guizhou Province, was
totally destroyed on July 26, 2007, after only 13 hours of operation.
Apparently, there was a problem with the quality of construction,
causing as much as 13,000 cubic meters of concrete and rock to wash
away, leaving a pit as deep as 11 meters, or the equivalent of a
three-story high building. According to Zhou Jianping, the consequences
could have been disastrous if floods had occurred at the same time and
the operators were unable to close the sluice gates.

At the Jinghong dam, built on the Lancang-Mekong River and lauded as one
of the most important hydro dams in Yunnan Province, the flood discharge
channel twice suffered serious damage from floods, once in 2008 and then
again in 2009. As the picture illustrated, the channel was torn open
like a big mouth as if blown up by a bomb, with steel bars hanging
around like withered plants.

Another of the incidents resulted in casualties: as Zhou Jianping
explained, the road leading to the site of the Jishixia dam on the
Yellow River in Qinghai Province suddenly collapsed one evening as a
result of silt being discharged. Drivers of two vehicles unknowingly
drove along the damaged road, crashing into the Yellow River. At least
eight people are still missing.

In his speech to the conference, Zhou Jianping concluded that the
accidents were the result of low standards, including inadequately
prepared surveys, unscientific design and construction plans, mismanaged
construction, absence of quality control and supervision, and even fraud
in building materials. All of these factors have contributed to the poor
quality of dam projects and compromised the safety of dams.

Regulations lag behind reality

Pan Jiazheng, one of the founders of China's hydropower industry and an
expert in water resources, often warned that any errors and oversights
in dam design and construction would compromise the quality of the
projects. Dealing with the aftermath of these problems would be more
costly, he said, including the loss of innocent lives.

For example, on August 27, 1993, the dyke in the Gouhou reservoir in
Qinghai Province burst, killing 288 people (the dam's height is 71 m).
Back in August 1975, two large reservoirs, Banqiao and Shimantan,
together with two other medium reservoirs and 58 small reservoirs in the
Zhumadian area of Henan Province, collapsed one after another, in just a
few hours.[i] Ten counties and towns in Zhumadian were flooded by as
much as 5.7 billion cubic meters of water, and 26,000 people died as a

Dams under construction are also encountering problems. The Xiluodu
hydropower station, for instance, China's second largest hydropower dam
on the Jinsha River, has been experiencing construction problems going
back to 2010. Engineers and workers on the construction site found that,
after pouring hundreds of cubic meters of concrete, the template was
incorrectly positioned. A person familiar with the situation said that
the financial cost of the mistake was not big, but the time lost to
removing the concrete (which had already solidified), and re-pouring it,
seriously affected the project's schedule.

According to a 2009 report by the Sinohydro Engineering Bureau 3 Company
Limited, entitled, "A summary report on technological research dealing
with problems at hydraulic structures," problems have occurred at a
number of dams: cracks were discovered in section 6 of the Danjiangkou
dam (on the Han River, a tributary of the Yangtze [ii]; leaks occurred
in the Shiban hydrodam structure in Fuling (formerly in Sichuan Province
and currently a District of Chongqing Municipality[iii]; leaks also
occurred in the Tianshengqiao tunnel of the Erlangba hydrodam in Shaanxi
Province; and concrete defects have been found in the shiplock of the
Three Gorges dam project. In fact, according to a 2006 survey of Three
Gorges, 733 cracks, with a total length of 4,688 meters, on both the
eastbound and westbound channels of the shiplock, have leaked water.
But, the survey said, these cracks were subsequently repaired in order
to meet the design requirements "through professional treatment."

As the Chinese media put it ironically, China's hydropower construction
has entered a "Great Leap Forward," with the giant power companies
divvying up watersheds and rushing to construct hydropower projects.
According to recent news, the Three Gorges Group is accelerating its
construction of four giant hydro dams on the Jinsha River that will
generate twice the power output of Three Gorges if all the projects go
into operation.

This situation worries the older generation of hydropower experts. As
Wang Shucheng explained, it used to take years to prepare surveys and
investigations before construction of a dam began. Now the job is
usually done in a hurry, he added. Especially worrying, many large
projects are being built in southwest China where the geological
conditions are complicated and the area is seismically active. For that
reason, it will be particularly dangerous to build dams without a sound
plan and without implementing it stringently, Mr. Wang warned.

According to information provided by CNCLD, as of 2009, China had built
and was constructing 5,443 hydro dams with a height greater than 30
meters. Thirteen of those are higher than 200 meters. But the "Dam
Safety Regulations," which are meant to govern dam construction in
China, were issued in 1991 and apply only to dams up to a maximum height
of 200 meters.

"The problem is that the regulations lag behind the reality," Zhang
Rushi, Deputy Director of the Work Safety Department of the Ministry of
Water Resources told the 2011 CNCLD conference. Because the regulations
are inadequate when it comes to meeting current needs for dam safety, it
is a high priority that they be revised.

China's poorly constructed dams and those that have become dangerous
after years of neglect are like ticking time bombs. According to an
earlier report about dam incidents entitled "Statistics and Preliminary
Analysis of Incidents with Dams and Reservoirs in China," more than half
of China's reservoirs were built between 1950 and 1980, most under
conditions known as "building while investigating, and building while
designing." These circumstances led to low standards and poor quality
construction. To make matters worse, most are today in a dangerous state
of ill-repair after decades of operation (see charts below).

Note: The data in Chart 2 comes from statistics gathered between 1954
and 2003. Dams in Chongqing Municipality are included in Sichuan
Province's statistics because Chongqing Municipality did not exist at
the time, but came under the jurisdiction of Sichuan Province. Source:
"Statistics and Preliminary Analysis of Incidents with Dams and
Reservoirs in China," by He Xiaoyan, Wang Zhaoyin and Huang Jinchi, and
Ding Liuqian. (Charts by Li Bogen).

Based on the statistics provided by He Xiaoyan (one of the authors of
"Statistics and Preliminary Analysis of Incidents with Dams and
Reservoirs in China," who is now working in the Department of
Flood-Control and Disaster Reduction of the China Institute for Water
Resources and Hydropower Research), there were a total of 3,481 dam
collapse incidents in the 50 years from 1954 to 2003 (excluding Taiwan).
He Xiaoyan points out that:

"Inadequate flood-discharging capacity and problems with project quality
were the main causes of dam failure and collapse; 96.4% of the
reservoirs where these incidents occurred were small ones."

China has become increasingly concerned about dam safety and has
repaired and reinforced 9,225 poorly constructed and dangerous
reservoirs in the past ten years. In the last three years alone, 64.5
billion yuan RMB has been spent. In the next five years, 41,000
reservoirs are set to be repaired, requiring large financial commitments
from state budgets.

As Zhang Rushi said, the preparatory work for the nationwide survey of
big dams and reservoirs has already been done. The investigation will
now be carried out by the Ministry of Water Resources, together with the
State Administration of Work Safety, the State Electricity Regulatory
Commission, and the Ministry of Agriculture.

You received this message as a subscriber on the list:

To be removed from the list, please visit:

'Happy' Bhutan alarmed by Himalayan climate change

'Happy' Bhutan alarmed by Himalayan climate change

by Adam Plowright

THIMPHU, August 24, 2011 (AFP) - Bhutan's prime minister has issued a dire warning about the impact of Himalayan climate change, saying it could wreck the tiny kingdom's ambitious plans to be a world leader in hydropower.

The isolated, mountainous nation sandwiched between India and China is famed for pursuing "happiness" for its citizens instead of orthodox economic growth, with environmental protection central to its development model.

Bhutan, home to 700,000 people, is already a carbon-neutral electricity producer, with almost all of its power generated at plants that capture energy from the cascading streams that criss-cross its spectacular landscape.

But Prime Minister Jigmi Thinley told AFP the country was powerless to prevent changes caused by shifting weather patterns which threaten regional water supplies and plans to harness the energy of the Himalayan snowmelt.

"The glaciers are retreating very rapidly, some are even disappearing. The flow of water in our river system is fluctuating in ways that are very worrying," he said in an interview in his office in the capital Thimphu.

"In the summer they overflow their banks in a way that used to never happen in the past and in the winter they shrivel and almost dry up.

"The climate is changing, global warming is real and the impact on our hydrology is very severe."

The increase in meltwater caused by warmer summers has also led to the creation of lakes high in the mountains that threaten people in the valleys below.

The government is building an early warning system to alert authorities to any possible breach of the natural dams that hold back the water.

In 1994, Lake Lugge in northern Bhutan burst and killed 21 people.

Currently, a team of 200 to 300 labourers and engineers are working in the same area to lower the level of the largest glacial lake in the country, called Thorthormi in Lunana district.

The workers, active during the summer months when work is possible in the icy and inhospitable area, are digging a drainage canal that will reduce the lake level by five metres (16 feet).

All the equipment for the task had to been carried, with the air too thin to use helicopters. To reach the spot on foot every man had to pass a 5,000-metre peak.

"It's literally spades and shovels," said Karma Tshiteem, the secretary of the Gross National Happiness Commission, a state agency that vets and proposes policy, who recently inspected the work.

"This is a stark example that climate change is not some theoretical thing that is still to be debated. We are facing it and having to do mitigation efforts," he told AFP in an interview.

On November 19, Bhutan will host a conference bringing together India, Nepal and Bangladesh to discuss ways to lessen the impact of global warming on the mountains, which are a source of water for 1.3 billion people downstream.

It is a follow-up to a similar meeting in Kathmandu in 2009 and an attempt to put climate change back on the international agenda, which has been dominated by concerns about debt and recession in developed countries.

For Bhutan, the change in river water flows caused by colder, drier winters and warmer, wetter summers is particularly alarming.

The shift may jeopardise ambitious hydroelectric power plans to raise capacity seven-fold from a current peak of about 1,500 megawatts (MW) from four plants, to 10,000 MW by adding another 10 projects by 2020.

By selling electricity to energy-starved neighbour India, the aid-dependent country had hoped to become economically self-sufficient by 2018.

But Thinley said the government was having to reconsider the assumption that rivers would be a boundless source of energy and income. The total potential for hydropower in Bhutan had been estimated at 30,000 MW.

"Hydropower may not be the sort of exponential source that we considered it to be," he said.

"The flow during the winter and summer used to be regulated, the variation was not so much. Now it is so much that in the winter, we are importing electricity from India."

The UN's top panel on climate change warned in a landmark 2007 report that "widespread mass losses from glaciers and reductions in snow cover over recent decades are projected to accelerate throughout the 21st century."

It later withdrew a mistaken prediction that Himalayan glaciers might have disappeared altogether by 2035 after admitting that the warning was an exaggeration based on faulty data and research.

Monday, August 22, 2011

Cambodia shrugs off aid curb

Cambodia shrugs off aid curb

Asia Times online, 23 Aug 2011

Cambodian leaders have shrugged off a World Bank move this month to
suspend new lending due to state-sponsored, large-scale evictions to
clear land for development projects. While rising access to private
Asian capital, particularly from China, has helped Cambodia weather
previous Western donor pressure for reform, the socio-economic costs
of the latest sanction could be much higher.

The World Bank had come under pressure from local and foreign non-
governmental organizations (NGOs) to take a tough stance against
Cambodia's government in response to well-documented forced evictions
of communities. The issue centered on a large-scale urban development
project planned for central Phnom Penh at Boeung Kak lake where many
of the residents are involved in catering to a growing tourist

The pressure increased late last year after an internal investigation
found that the World Bank had violated its own social and
environmental policies in supporting the project. It is being led by
the privately-held Cambodian Shukaku company, which signed a 99-year
lease with the government in 2007 to develop Boeung Kak and the
surrounding area into a district of luxury apartments and high-end

The company is chaired by Lao Meng Khin, a powerful senator affiliated
with the ruling Cambodian People's Party (CPP) and a close associate
of Prime Minister Hun Sen. Shukaku is partnered with the Inner
Mongolia Erdos Hongjun Investment Co Ltd of China, which has pledged
broadly to spend US$3 billion in Cambodia on property development,
metal processing and power generation.

However, the joint venture has raised some eyebrows due to the
unlisted Chinese company's murky background and ownership. Critics say
that the company has no proven expertise in any of the areas in which
it has pledged to invest, and there is an unusual lack of publicity
around a company that has promised to commit such a large amount of
capital outside China.

The developers began pumping sand into the lake in 2008, flooding
homes and virtually wiping out the once tranquil lake's ecology. Land
holders have had no say in the process and have been accused by the
government as illegal squatters on state-owned land. These
accusations, NGOs say, run counter to Cambodia's land law, which
provides protections against evictions to long-time land holders. Many
of the residents at Boeung Kak have lived there for decades.

However, the lake's residents were excluded from a process organized
by the World Bank to adjudicate property claims. Over 2,000 have
already been forced from their homes and another 10,000 now face
eviction. The international lender has since called on the Cambodian
government to halt the evictions and agree to fair compensation for
land holders. After failing to reach an agreement, the World Bank
stated on August 9, "Until an agreement is reached with the residents
of Boeung Kak lake we do not expect to provide new lending to

The World Bank has lent Cambodia between US$50 million and $70 million
annually for the past few years with the last disbursement made in
December 2010. Most of the loans have been committed to health and
education projects. Despite these capital commitments, Cambodian
leaders have so far shrugged off the World Bank's statement about
withholding future loans.

Analysts say they can afford to, given the billions of dollars of aid
and investment the government now receives from China without strings
attached. Cambodia's foreign donors pledged $1.1 billion in aid last
year, with China committing the most of any country. China has also
become Cambodia's largest source of foreign direct investment (FDI),
with stated plans to spend $8 billion on 360 different projects during
the first seven months of 2011.

It is difficult to separate Chinese foreign aid from investment since
they are often intertwined. Chinese companies receive government
subsidies to participate in projects that by Western standards would
often be considered as development related. During a 2010 visit by Hun
Sen to Beijing, China promised to provide a $300 million loan to
construct two national highways and irrigation projects. Other deals
concluded during the visit, mostly related to infrastructure, were
worth around $293 million.

Hun Sen has made it clear in several speeches that he prefers Chinese
to Western aid due to the lack of attached conditions. Western donors
often predicate their aid packages on democratic reforms and
improvements in human rights and counter-corruption. Hun Sen is
apparently not alone in this opinion: the opaque regimes in Laos and
Myanmar have also shown a preference for Chinese aid and investment
for similar reasons.

China became Laos' largest foreign investor in 2010 with total
investments amounting $2.9 billion since 2000. Much of China's
investment there is in mining, hydropower projects, agribusiness and
services. It has also secured a prominent place as an aid donor
through large-scale infrastructure projects such as the construction
of Route 3 connecting southwestern China with northern Thailand
through Laos.

Some of these projects have aimed more at securing goodwill, such as
the widening of the Central Avenue in downtown Vientiane and the
construction of the National Cultural Hall, than making money. That's
evidenced in the fact that many loans are dispensed interest-free.

Last year, largely Western aid agencies and donors cautioned Laos
about racing ahead with a development plan based too heavily on
natural resource exploitation without enough emphasis on health,
education and capacity development among the local population.

The Lao government has stated some of its own concerns over
investment, especially in terms of long-term and concessions, such as
those granted to Chinese investors to build casino complexes. However,
the government has made it clear it intends to reduce its high
dependency on official development assistance in favor of increased
access to Asian private capital, especially from China.

In Myanmar, where the country ostensibly made a transition from direct
military rule to a democratic system earlier this year, there is
increasing Chinese investment as the country's leaders continue to
look to Beijing for economic as well as diplomatic support. Much of
China's investment is in natural resource extraction, hydropower
projects, and infrastructure, but there is a growing interest in
acquiring agricultural land, especially for rubber.

Myanmar's rulers have long relied on Chinese investment and aid to
make up for a lack of development assistance from the West. Sanctions
and concern over human-rights issues have prevented Western donors
from providing funding at levels similar to that donated to Laos and
Cambodia. Human-rights and political opposition groups have long
argued that Chinese aid has allowed the military to stay in power and
continue to repress the population.

China plans in coming years to further expand its trade with the
region and is making moves to develop more extensive physical trade
arteries. Beijing has announced plans to pour money into road and rail
projects in coming years, linking its landlocked southwestern region
with ports in Myanmar, Thailand and Cambodia. It is hoped this will
increase trade, promote regional investment and tourism, as well as
strengthen ties with the member states of the Association of Southeast
Asian Nations (ASEAN).

This may be music to the ears of Southeast Asian policymakers who are
interested in developing their countries' economic potential as well
as improving their own financial situations given the high levels of
corruption in the region. However, growing Chinese influence,
especially in the economic sphere, is becoming increasingly worrisome
to the average farmer and shopkeeper in these countries.

For instance, there is growing discontent in Laos over what some see
as too much Chinese influence in the country. Laos are especially
concerned by the growing number of Chinese migrating to work in the
country on Chinese projects. This became especially acute in Vientiane
when plans for an urban development project near the iconic That Luang
monastery came to light.

The project, which was widely perceived as building a "Chinese city"
in the heart of the capital, has stirred nationalistic responses from
the city's growing middle class. In addition to a penchant by Chinese
companies to import Chinese workers to work on their projects, Laos
are worried those workers will not return home after the projects are
finished, as has been the case on certain roadway projects in remote
northern areas.

Land concessions are also an issue, especially in the north where
Chinese companies have been able to acquire large tracts of land for
plantation agriculture. While many villagers have been able to arrange
contracting agreements to provide rubber to Chinese companies, others
say they have been forced to convert their land to rubber cultivation.
The north is also the location of two Chinese casino, hotel and
shopping complexes at Boten and Huay Xai, where sovereignty has
seemingly been handed over to Chinese developers.

There is also a longstanding, but largely quiet, animosity towards
Chinese influence in Myanmar. Growing Chinese economic influence in
recent years has heightened a perception of Chinese as untrustworthy
businessmen bent on taking over the country.

As evidence, many Burmese point to the large areas of Mandalay and
other cities which have become crowded with shops with store signs
only in Chinese and catering to the growing number of Chinese moving
into them. This perception apparently extends to the upper echelons of
government, where some leaders are reportedly alarmed by China's
growing economic clout vis-a-vis the local population.

For the average Myanmar farmer, especially in the country's northern
region where there is an increase in China-linked agribusiness
projects, there is concern over being evicted from their lands in
favor of commercial plantations. Human rights groups have documented
this practice throughout the country in a process often carried out by
military units.

Others are worried their land will be taken for infrastructure and
other projects. Environmental groups have documented the confiscation
of land to build a deep sea port in Myanmar's south that will ship oil
and gas through pipelines being constructed by Chinese companies to
China's land-locked southwestern region.

While not solely the work of Chinese companies, rising evictions in
Cambodia are creating a huge number of landless displaced people
across the country. Some analysts speculate that the sheer number of
people displaced could lead to social stability problems in the future
as Cambodians forced off their land and without other viable economic
options become increasingly desperate.

Unless Cambodian government policymakers make a shift from their
headlong rush for development and reckless policies to supply China's
demand for natural resources, agricultural products and diplomatic
allies, the risk will rise that their development projects cause more
social problems than they resolve.

It's a message the World Bank has delivered belatedly with its
suspension of new lending and advice Cambodia's leaders would be wise
to heed if they are to maintain social stability amid rapid economic
growth and rising Chinese influence.


*World Bank suspends new lending to Cambodia over eviction of

Relations fray as thousands of residents are evicted to make way for
Phnom Penh property development, Wednesday 10 August 2011 18.14 BST

The World Bank has suspended new lending to Cambodia in a dispute over
the eviction of thousands of poor landowners to make way for a
property development in the capital, Phnom Penh.

Relations between the bank and the Cambodian government have frayed
over plans by a property developer to fill in a lake in the middle of
Phnom Penh to build luxury flats and high-end shops. Thousands have
been forced from their homes, with more facing eviction.

The World Bank responded to a critical internal review by calling on
the Cambodian government to stop evictions and agree to fair
compensation for remaining landowners. But the two sides have failed
to reach agreement and the World Bank's patience has snapped.

In a statement on Tuesday, Annette Dixon, country director, said:
"Until an agreement is reached with the residents of Boeung Kak lake
we do not expect to provide any new lending to Cambodia. The
government is continuing to implement existing programmes and we are
working with the government to ensure that all its legal obligations
under those projects will be met."

The suspension of new lending follows an investigation by the bank's
inspection panel, an internal watchdog, in response to pressure from
NGOs acting on behalf of lake residents.

While noting the undoubted benefits for about 1m households of a
project to provide poor Cambodians with land titles after the
wholesale destruction of legal documents under the Khmer Rouge, the
panel pinpointed several problems.

Residents in the Boeung Kak lake area were denied access to due
process of adjudication of property claims and were displaced, in
violation of the policies the bank agreed with the government for
handling resettlement, the panel found. It also said the bank was too
slow to respond after the expulsion of 2,000 people. Another 10,000
face eviction to make way for the project, which is led by China's
Inner Mongolia Erdos Hongjun Investment Corp, an unlisted firm that
has pledged to spend $3bn in Cambodia on property, metal processing
and power generation.

The figure dwarfs World Bank lending in Cambodia, one of the world's
poorest countries. Existing projects (16 worth about $343m), mainly
for health and education, will carry on. The bank's last loan was made
in December. The World Bank has lent Cambodia about $50-70m annually
in the past few years.

As part of the current spat, the Cambodian government has refused to
consider plans for a 35-acre (15-hectare) plot at Boeung Kak to be set
aside for housing. Landowners at the lake expected their claims would
be respected when government workers began surveying the area in 2006.
But the government excluded them from the process in early 2007, and
then announced a $79m, 99-year lease to a developer with close ties to
the prime minister, Hun Sen. Many of the owners were suddenly accused
by the government of being illegal squatters on state-owned land. In
2008, developers began pumping sand into the lake, flooding out homes
and virtually destroying the lake's ecology.

An estimated 30,000 people are driven from farmland or urban areas
every year to make way for property developments or mining and
agricultural projects.


*Cambodia to World Bank: We Don�t Need Your Money*

Devex, 10 August 2011

The World Bank has frozen new loans to Cambodia over a controversial
real estate project that has already displaced thousands of poor
residents in the capital. Several donors have also threatened to
withdraw aid because of the growing cases of forced evictions.

But the country, one of Asia�s poorest, is undeterred. Why?

Because it has China�s pledges of investments and aid to rely on.

Since 2008 when development of the $2 billion, 133-hectare Boeung Kak
lake area in the capital began, around 3,000 poor residents have been
forcefully evicted from their homes, often because these were flooded
as developers began pumping sand to fill in the lake.

This is International Rivers' mailing list on China's global footprint, and particularly Chinese investment in
international dam projects.

You received this message as a subscriber on the list:

To be removed from the list, please visit:

U.S. faces a big dam problem in Pakistan
Editorial: U.S. faces a big dam problem in Pakistan
By the Editorial Board | Posted: Monday, August 22, 2011 12:00 am

Last week, the McClatchy newspapers reported that the Obama
administration is considering providing seed money for a $12 billion
hydroelectric dam on the Indus River in northernmost Pakistan.

Just wait for Congress to get back from vacation. A lot of them,
Republicans and Democrats alike, are going to hate this idea.

It may be too late; the money would come from a $7.5 billion, five-year
civilian aid authorization that Congress passed in 2009. Sponsored by
Democratic Sen. John Kerry of Massachusetts and Republican Sen. Richard
Lugar of Indiana, the money is intended to shore up America's reputation
among the Pakistani people.

No doubt that won't stop some in Congress from screaming. Just because
the spending is authorized, it doesn't mean it has to be spent. And
since the Kerry-Lugar fund was passed in 2009, U.S. relations with
Pakistan steadily have gone downhill.

In fact, the total project footprint of the proposed Diamer-Bhasha Dam
begins on the Karakoram Highway just outside of Abbottabad — where Osama
bin Laden was hiding, right under the noses of the Pakistani military,
before he was killed on May 1.

The United States would provide about $200 million to get the ball
rolling. The Pakistani government hopes that would attract private
investors and help from the World Bank and the Asian Development Bank.

Money isn't the only problem facing the Diamer-Bhasha Dam. Its location
is in the mountainous Gilgit-Baltistan region, adjacent to the
Jammu-Kashmir state that India administers and claims as its territory.
The entire border area, including Gilgit-Baltistan, has been in dispute
since the India-Pakistan partition of in 1947. In any discussion of
where a nuclear war might start, Kashmir is always a contender.

And then there is China, India's not-so-friendly neighbor to the north.
China is investing heavily in Pakistan. For India, the only thing worse
than having the United States and the World Bank helping to build a dam
in Pakistan would be for the Chinese to build it.

There's little doubt that had the Diamer-Bhasha Dam been in place over
the last two years, it would have mitigated flooding that killed an
estimated 2,000 Pakistanis. Nor is there any doubt that energy-starved
Pakistanis could use the 4,500 megawatts of power that the 890-foot-tall
dam would generate.

Ninety percent of the $20.7 billion that the United States has sent to
Pakistan to buy its cooperation in the War on Terror has gone to the
Pakistani military, though military aid lately has been suspended.

Meanwhile, the Chinese buy friends in Pakistan by building nuclear power
plants. The Saudis build mosques and sell them cheap oil. The United
States sends them F-16s and bombs them from drone aircraft. We could use
some good PR in the civilian population.

But here's the rub: Pakistan could build its own dam if it reformed its
tax structure. The Carnegie Endowment has estimated that 10 million
Pakistanis earn more than $3,488 a year and thus should pay income
taxes. Only 1 in 4 does. Tax-dodging is the national pastime,
particularly among the elite, particularly among the members of Parliament.

That's an issue we'd like to see Congress debate.

You received this message as a subscriber on the list:

To be removed from the list, please visit:

Friday, August 19, 2011

SA and Lesotho to build 1 200 MW hydropower plant

SA and Lesotho to build 1 200 MW hydropower plant

By: Brindaveni Naidoo
11th August 2011

South Africa and Lesotho on Thursday signed an implementation
agreement for the second phase of the R15-billion Lesotho Highlands
Water Project (LHWP) and committed to building a hydropower station
with an installed capacity of between 1 000 MW and 1 200 MW.

The hydropower plant would be operational in 2018, and would see some
200 MW supplied for Lesotho�s power needs, with the remaining power
transmitted to South Africa.

South African Water and Environmental Affairs Minister Edna Molewa
told Engineering News Online that Cabinet had approved the project and
that the two countries would now sign a memorandum of understanding
(MoU) under the auspices of South Africa�s Department of Energy.

The Lesotho government also approved the project, and draft agreements
were ready, Lesotho Natural Resources Minister Monyane Moleleki said
in an interview in Maseru.

�The MoU to be signed between the two countries will not only focus on
hydropower, but will see both countries look at projects on renewable
energy, including solar and wind,� he said.

Both Ministers remained confident that the skills needed for the
second phase of the project were available.

�There is sufficient capacity between both countries, and where or if
necessary we will deploy required skills. But it is key to remember
that we have Eskom coming on board on this project, as well as the
Lesotho power parastatal,� Molewa explained.

The LHWP would strengthen regional integration by using water as a
catalyst for socioeconomic development, as well as to advance economic
links with key African partners.

�The nature of our cooperation is aimed at mutual development of our
countries� water sectors as a foundation and a catalyst for modernised
and integrated economies. It embodies the Nepad principles for
development and Africa�s renaissance to eradicate poverty and

Phase two of the LHWP also comprises a water delivery system to
augment the delivery of water to South Africa.

The system comprises the Polihali reservoir on the Senqu river, and a
water conveyance tunnel connecting Polihali reservoir with the Katse
reservoir. It would also see the development of key infrastructure
including access roads to the project sites and camps, as well as
power transmission lines and administrations centers, including social
and environmental projects and programmes.

This phase would also include a pump storage scheme and associated
transmission lines.

Edited by: Mariaan Webb

You received this message as a subscriber on the list:

To be removed from the list, please visit:

Thursday, August 18, 2011

Laos in top ten Chinese new investment destinations

Laos in top ten Chinese new investment destinations

Vientiane Times
18 August 2011

Laos is among China's top ten new foreign investment destinations,
according to a report on the website of the Ministry of Commerce of

From January to May this year the value of China's newly signed
foreign contract projects reached US$55.98 billion, up by 23.2 percent
year on year.

The top ten countries and regions in terms of value of newly signed
contracts with China were India, Hong Kong, Laos, Pakistan,
Kazakhstan, Bahamas, Malaysia, Angola, Nigeria and Algeria, with a
total contract value of US$29.13 billion, accounting for 52.1 percent
of the overall value of newly signed contracts, the report said.

With its high potential for energy development, mining and hydropower
have been the most attractive sectors for Chinese investment in Laos.

"Mining and hydropower development are the most attractive sectors for
Chinese investors and have drawn the most inquiries through our
office," said Minister Counsellor in charge of economic and commercial
affairs at the Lao Embassy to China Mr Khampanh Sengthongkham.

Infrastructure development is seen as another emerging sector with
potential for Chinese investment, with a high-speed rail project to
link the Chinese border to Vientiane currently in the process of being

Greater engagement in the Lao mining sector in recent years by Chinese
companies has helped the registered value of Lao exports to China
reach more than US$246 million in the first quarter of this year,
double the figure recorded in the same period last year.

Last financial year the top three items exported by Laos in terms of
value were copper ore, copper and electricity, worth more than US$475
million, US$376 million, and US$288 million respectively.

Hydropower development has been growing rapidly in Laos. In 2006 the
country had only 10 power plants with a total capacity of 700MW. Now
it has 14 plants with a total capacity of 2,540MW and has the capacity
to develop to about 26,000MW in total.

The Lao government has announced its ambitious plan to make the nation
the 'battery of Asean' and feed the energy-hungry region.

Laos, one of the poorest countries in Asia, hopes to overcome poverty
by using revenues generated by the electricity and mining sectors to
fund development projects that will ensure poverty eradication by 2015
and removal from the UN list of least developed nations by 2020.

This is International Rivers' mailing list on China's global footprint, and particularly Chinese investment in
international dam projects.

You received this message as a subscriber on the list:

To be removed from the list, please visit:

China probes its Africa model

An excellent two part analysis, with a special focus on dams in part 2.

China probes its Africa model (1)

Yi Yimin
August 18, 2011

As the public turns its attention to Chinese investments in Africa's
fossil fuels, mining and dams, some have noticed parallels with
environmental and social problems at home, writes Yi Yimin.

Chinese investments in Africa are starting to attract more media coverage
and public attention in China. Last year, three incidents in particular
sparked interest.

First, in June 2010 the Industrial and Commercial Bank of China (ICBC)
agreed to invest US$500 million in Ethiopia�s US$1.75 billion Gibe III
dam. The project will affect the Omo River, an international waterway, and
the vulnerable ecosystems of Lake Turkana, upon which 300,000 residents of
northern Kenya rely.

Then on October 15, supervisors at the Chinese-owned Collum mine in
Zambia, southern Africa, shot and wounded at least 11 workers during a
dispute � showing that Chinese investment in mining in Africa can create
serious labour-relations issues, as well as environmental problems.

Finally, in November China National Offshore Oil Corp (CNOOC) and Ghana
National Petroleum Corp joined forces to attempt to buy the US firm Kosmos
Energy�s stake in the deepwater Jubilee offshore oil field in Ghana, west
Africa. This deal did not go through, but commentators linked it to
earlier reports that China would provide the country with US$13 billon in
loans for oil and gas infrastructure, agricultural development and other

These three types of projects: fossil fuels, mining and dams, are the main
areas of Chinese investment in Africa, and the three cases reflect a
number of characteristics and problems around Chinese aid and investment
on the continent.

Usually, the difference between aid and investment is that aid is intended
to provide humanitarian assistance or promote social and economic
progress; unlike investment, there is little concern in aid about recovery
of funds. Aid is also preferential � it is provided gratis to the
recipient, or at a low rate of interest.

China invests and provides aid in a wide range of fields in Africa. These
include: agriculture; healthcare; emergency relief; scholarships,
exchanges and training; it also includes voluntary services and the
waiving of loans. But although there are differences in emphasis across
different African nations, the most funding of all is for the construction
of government buildings, dams and other infrastructure.

These are the �full-service aid projects� advocated by the Chinese
government, where the project implementer is a Chinese firm and project
loans are transferred directly from the Export and Import Bank of China
(China EXIM Bank) to that firm rather than to the recipient nation, and
equipment required is imported from China. These aid projects play an
important role in helping Chinese firms expand overseas.

As for Chinese investment in Africa, fields include: agriculture;
forestry; information and communications technology; industry; finance and
healthcare. But most investment is concentrated in construction, energy
and mining.

Imbalances in aid and investment

China has experimented with linking aid to economic development, both at
home and abroad. In the controversial �Angola Model� � as resource-backed
financing agreements are referred to by Chinese diplomats � the recipient
nation uses its commodities, such as oil resources, to secure low-interest
loans for projects.

This means the recipient nation can turn resources into cash when funds
are short and develop its extractive industries. It also often secures
China�s state-owned oil companies resource-development rights in the
recipient nation.

However, it is not enough to focus only on economic development. For the
citizens of the recipient nation, justice, participation and
sustainability should be part of the planning process right from the

On balance it seems that China regards Africa primarily in terms of its
resources and potential market � and prioritises those fields over aid,
leading to some negative consequences for recipient nations. Prior
research on the �resource curse� in countries such as Nigeria suggests
that over-reliance on resource development for economic growth can produce
some benefits for society, but can also gravely damage the local

China hopes to use this commercial cooperation model to make aid projects
more sustainable � but it risks putting Chinese firms in absolute control
of projects, with potentially negative effects. Chinese companies may
ultimately make the decisions about whether a project goes ahead,
influencing policy and allowing the company risk-free entry to the
recipient nation.

There is a risk that Chinese companies may apply �high-efficiency� methods
overseas that, for example, leave farmers in a weak position � as has been
the case in some agricultural investment models in China. The pursuit of
profit has also led small private enterprises from China to become
involved in illegal trades, in timber or ivory for example, to the
detriment of the local environment.

Extending domestic development models

In order to understand the environmental and social impacts of China�s
investments in Africa, one should probably understand the impacts of
Chinese investment at home in China, since many similar problems arise.

Thirty years of reform and opening up in China has led many � particularly
those that have enjoyed the fruits of this process � to believe that
economic growth will lead to development in other areas. That belief has
been extended to overseas investment. But many others worry about the
negative impacts of China�s breakneck growth: the destruction of China�s
environment, the pillaging of resources and rising social injustice.

Importantly, within China there are also examples of loans and engineering
projects being exchanged for resources contracts. For example, last
November it was reported that the local government of Ordos, in Inner
Mongolia, had decided manufacturing and high-tech projects of a certain
size would be allocated corresponding amounts of coal. This led a number
of firms to rush to invest and claim their coal. This type of �resources
for investment� deal has been accused of selling off national resources on
the cheap, as well as severely damaging the Ordos grasslands.

The Chinese government�s Western Development strategy, first implemented
in 2000, led to domestic investors favouring the west of the country,
which is rich in resources and contains huge market potential, but is
economically backward compared to the east. However, the single-minded
focus on developing resources � much like in Africa � has created negative
environmental and social consequences.

An essay by Yang Yong, titled �Facing up to the environmental misery of
resource development in western China� points out that a series of large
and sensitive projects are under construction in China�s west, worsening
environmental damage and creating social inequality and conflicts. As
development proceeds and capital is invested, the potential to prioritise
greener industries or tourism is forgotten in favour of resource

Developing a country�s resources, of course, does not necessarily create
problems � but if China has been unsuccessful in using policy and
regulation to prevent the �resource curse� in its own western region, how
can we trust investments in Africa will only have positive results?

Yi Yimin is project officer at Moving Mountains, where she researches the
social and environmental impact of economic development in China and
overseas. Yi is a member of Friends of Nature.

Homepage image from documentary "When China Met Africa" shows Zambian
trade and commerce minister Felix Mutati visiting a Chinese-backed copper

China probes its Africa model (2)

by Yi Yimin
August 18, 2011

China can improve its policies on aid and investment in Africa, writes Yi
Yimin in the second section of a two-part article. But doing so will

As outlined in the previous section of this article, Chinese investments
in fields such as energy, mining, dam construction, forestry and
agriculture have had complex social and environmental consequences for
countries in Africa.

Chinese energy investments in Africa mostly focus on oil. According to the
2009 Analysis of Chinese Oil Imports and Exports by Tian Churong, African
oil producers, such as Angola, Sudan and Libya, exported 61.42 million
tonnes of crude oil to China that year, accounting for 30.1% of China�s
total crude imports.

Chinese investment in mining has also heated up in the last few years �
private investment, in particular. Labour disputes in Zambia, mentioned in
the previous part of this article, exposed private mining companies as
only employing �temporary workers�, not paying welfare � and in the most
prominent case, using relationships with the authorities to put down
disputes, and firearms to deal with workers� protests. Since Chinese firms
often ignore civil society and requests for dialogue with NGOs, they miss
out on opportunities to ease such conflicts and exacerbate the negative
impacts of their investments.

Dam projects, another key area of investment, are hugely expensive � and
can cause significant social and environmental impacts. NGOs like US-based
International Rivers, authors of China�s Environmental Footprint in
Africa, have expressed concerns about several dams on the continent either
proposed or under construction by Chinese companies, including: the Bui
Dam in Ghana, which will flood one quarter of the Bui National Park;
Gabon�s Kongou Dam, which will have impacts on forests in the Ivindo
National Park; Sudan�s Merowe Dam, where fluctuating water levels and
sedimentation could have serious negative effects on aquatic ecosystems,
water quality and public health; Ethiopia�s Gibe III Dam and Mozambique�s
Mphanda Nkuwa Dam.

The environmental and social impacts of the Mphanda Nkuwa hydropower
project in Mozambique are fairly typical. The project was first proposed
in April 2006 and China Export-Import Bank pledged to finance it. Energy
minister Salvador Namburete approved it in August 2010 and banks will
finance 70% of the construction costs.

The proposal was met with concern from local environmental groups; some
tried to lobby China Exim Bank to withhold their support for the project.
Why? Because the Cahora Bassa dam, built in the 1970s, provides enough
electricity for all of Mozambique, but its power is sold off to nearby
South Africa � even the capital city, Maputo, has to purchase its
electricity back from its neighbour. Mozambique does not lack power, it
lacks infrastructure, such as a power grid � over 80% of the country is
not yet on the grid and less than 10% of the population use electricity.
Most of the power from the US$2.3 billion dam would still be sold to South
Africa. Moreover, the Zambezi Delta has for decades suffered erosion due
to the Cahora Bassa Dam. An ecological restoration project is planned, but
the Mphanda Nkuwa Dam will mean that the environment is doomed.

Many dams in Africa will have similar social and environmental impacts.
Local residents often do not benefit from the electricity or economic
development, but are displaced and lose their fishing or farming
livelihoods. Since these projects often lack transparency and financing
comes from overseas, it is hard for local NGOs to help protect the rights
of residents.

Investment in dam-building on international rivers should be approached
even more cautiously. This year and last, Kenyans took to the streets in
protest against Chinese dam investment � opposing the US$500 million loan
from the Industrial and Commercial Bank of China (ICBC) for Ethiopia�s
Gibe III dam.

The main cause of deforestation in countries like Gabon, Cameroon,
Equatorial Guinea, Republic of Congo and Mozambique has been the illegal
trade in timber. These countries often have good forest protection
policies and laws, but NGOs who monitor forest protection and the timber
trade say that these are not enforced, often due to corruption. Timber
traders, some of whom are Chinese, often encourage locals to fell trees
and the authorities do not have the resources to supervise. For example,
it is estimated that in 2005, 94% of all timber produced in Tanzania was
logged illegally. Besides the environmental destruction, the rapid
reduction in timber resources affects local people who relied on the
forests for their livelihood. According to China Safari by Michel Beuret
and Serge Michel, Chinese traders have been accused of trapping endangered
animals while logging trees.

One problem highlighted by Chinese investment in Africa is that Chinese
government policy only provides basic outlines, often without detailed
regulations and standards for implementation � or openness and public
participation in that process. Therefore, observers are unclear about the
extent to which regulations are being carried out.

For example, China�s regulations on the management of overseas aid
projects specifically state that there must be both a feasibility study
and a technical study, which should have different emphases and be carried
out by different parties. But there are no details on what those studies
should contain; how important evaluation of social and environmental
effects should be; or the standards for evaluation.

China itself was once a major recipient of aid and the country�s
experiences are an important part of its overseas aid policy, especially
when tackling difficult questions. How can international aid help with
education, infrastructure, poverty alleviation and water safety? How to
protect local economies as they open up? How to protect the interests of
farmers? How can the environment be protected as the economy develops?
Understanding China�s experience and discussing these questions can help
to offset the negative impacts of investment.

It is only the on the basis of this open discussion that China can improve
its policies on aid and investment in Africa.

Yi Yimin is project officer at Moving Mountains, where she researches the
social and environmental impact of economic development in China and
overseas. Yi is a member of Friends of Nature.

Image by David Haberlah shows the Merowe Dam construction site.

You received this message as a subscriber on the list:

To be removed from the list, please visit:

Ethiopia seeks funding from diaspora for giant dam

Forex Bonds Floated for Diaspora
August 18th, 2011

The Ethiopian diaspora are now being enticed to purchase bonds which are
floated by the federal government for the financing of the Grand
Renaissance Dam under construction on Abay River. The bonds will be
available for purchase in USD, Euro and Pound Sterling currency.

All Ethiopian nationals and foreign nationals of Ethiopian origin living
and working outside Ethiopia can now buy bonds as small as 50 dollars/
Euros/ pounds to support the financing of the dam. This is being
introduced at a time when the climate of support from the nation for the
Dam is high; the nation is taking on the aspiration of covering the dam�s
4.8 billion dollar costs on its own. Bonds worth 100, 300, 500, 1000,
3000, 5000 and 10,000 worth bonds in the above three currencies are also
available for purchase.

The new bonds, dubbed as Grand Ethiopian Renaissance Dam Bonds, will
replace the millennium bond of Ethiopian Electric Power Corporation
(EEPCo) that was previously offered abroad, to the Ethiopian diaspora.

"The bonds have been circulated abroad. They are already available for
purchase in Ethiopian embassies, consulates and missions� offices,"
Issayas Bahire, president of the Development Bank of Ethiopia (DBE), told
Capital on Friday.

Directed by the National Coordination Council for the construction of the
dam headed by Hailemariam Desalegn, Deputy Prime Minister and Minister of
Foreign Affairs, the financial sector regulator National Bank of Ethiopia
(NBE) has issued a new document �The Grand Renaissance Dam Bond
Guidelines� detailing the bond�s sale, yield and other terms.

According to the guidelines, the Ministry of Finance and Economic
Development (MoFED) and EEPCo are respectively offering bonds that can be
purchased in birr and in forex.

Forex Bond

The bond offered in forex will be sold by Commercial Bank of Ethiopia
(CBE) through its branches, embassies, consulates and other representative

EEPCo is floating forex bonds which CBE will sell on its behalf.

"The federal government has awarded a full guarantee to the bond," says
the NBE guidelines.

The bond has two maturity date offers; buyers can acquire bonds that will
mature in five years or between five and ten years. Free for choice,
buyers can buy either bonds with interest or non interest bonds.

According to the guidelines, once one buys bonds, yields will be
calculated from day one and they shall be paid at the end of every six
month period to buyers in a currency he or she bought the bonds with.

Yield, which means the interest buyers can collect from the purchased
bonds, are calculated as per the period of maturity the bonds have. If one
bought a bond of the five year bracket, the yield one will receive
biannually will be square with the London Interbank Offered Rate (LIBOR)
plus 1.25 percent of the total bond�s value.

LIBOR is a competitive rate daily set for interbank lending-banks
borrowing and lending to each other using commercial paper. Repurchase
agreements and similar instruments are usually benchmarked by the London
monetary market.

The NBE guidelines state the following interest calculations for bond
buyers. Bonds with a 6-7 year maturity date will be subject to LIBOR plus
1.5 percent; an 8-10 year old bond will be subject to LIBOR plus two
percent interest rates.

To buy the bonds, Ethiopians or other nationalities of Ethiopian origin
can simply go to any nearby Ethiopian embassy or consulate or mission
offices. They can also send money to CBE using money transfers to the
account CBE is currently advertizing.

Using SWIFT transfers, cash purchases are available to Diaspora who have
foreign currency accounts. To encourage those who will use money
transfers, CBE is covering the transfer fee. For example if you buy a 100
dollar bond and pay a 10 birr transfer fee to make the payment; CBE will
issue you a bond worth 110 dollars. To accommodate such small
transactions, bonds worth 5 and 10 dollars, Euros and Pounds are being

Birr Bond

Already in operation and receiving support across the board are purchases
of bonds in birr that are also named Grand Ethiopian Renaissance Dam Bond.

CBE in Ethiopia, consulates and embassies abroad and upcoming offices to
be named by DBE are all selling these bonds.

The Ministry of Finance and Economic Development will be the party
indebted for the bonds, giving the bond sales guarantee from the federal

There are fourteen different bond values worth between 25 and 1 million
birr, and one can buy as many bonds as they like.

There are two types of maturity dates offered for the bond; one for five
years and the other for more than five years.

For a five year bond purchases, 5.5 percent of the bond�s value yield and
for above five year bonds, 6 percent interest will be paid. This amount
will be calculated for every month starting from the day of the bond
purchase and will be paid every six months to the buyers.

State and private companies� employees� alone have so far raised close to
3 billion birr; as a one time grant of their monthly salary and bond
purchase. Grants were later transferred to the purchase of bonds. Each
employee will now own a bond worth his/her grant of one month salary and
will receive yield every six months until the maturity date arrives and
they get back the full principal amount.

Secondary market for bonds

The NBE guidelines say you can buy bonds on behalf of others or as a gift.
You can also easily transfer it to another party; at the back of the bond
itself is a space for such transfers to up to three people.

If you want to sell the bond, not only will you be able to do so but all
banks operating in the country are by NBE�s regulation obliged to offer
you a loan if you want to put it as collateral.

The Grand Ethiopian Renaissance Dam is currently under construction on the
Abay (Blue Nile) River, about 40 km east of Sudan in the Benishangul-Gumuz
Region of Ethiopia.

At 5,250 Mega Watts, the dam will be the largest hydroelectric power plant
in Africa when completed, and the reservoir at 63 billion cubic meters
will be one of the continent�s largest. --Capital

You received this message as a subscriber on the list:

To be removed from the list, please visit: