Thursday, December 20, 2012

Two articles on renewable energy investments in China

China set to subsidize renewable energy
By Richard Fu
Shanghai Daily
Dec 20, 2012

http://www.shanghaidaily.com/nsp/Business/2012/12/20/China%2Bset%2Bto%2Bsubsidize%2Brenewable%2Benergy/

CHINA will pay 8.6 billion yuan (US$1.4 billion) in subsidies for power
generated from renewable sources this year, the Ministry of Finance said
yesterday.

The funds will be allocated by provincial financial authorities to grid
companies which purchase renewable power from generators at above-market
tariffs.

Of the funds for this year, 5.85 billion yuan will go to wind power, 723
million yuan for solar power, and 2.02 billion yuan used to subsidize
electricity generated from biomass, the ministry said in a statement
posted on its website.

Earlier this month, the National Development and Reform Commission,
China's top economic planner, asked grid operators to pay overdue
subsidies to renewable power developers for the period from October 2010
to April 2011, following a two-year delay.

Grid companies are required to pay subsidies - a fixed amount allocated
on top of the benchmark tariffs for coal-fired power in each region -
while they can collect a surcharge from consumers to finance the payment.

But the payment has been halted in some provinces because the surcharge
failed to cover the subsidies, creating cash flow pressure on many
developers.

****

China Tops World in Wind Power, Hydropower Capacity
Xinhua News Agency
December 9, 2012

http://www.bjreview.com.cn/Energy/txt/2012-12/10/content_505918.htm

China's installed capacities for wind power and hydropower have grown to
the world's largest, said Liu Zhenya, president of the China Electricity
Council (CEC), on Sunday.

Liu said at a power industry summit that China's installed wind power
capacity expanded rapidly in the past decade, recording a yearly growth
of more than 60 percent. Its cumulative total, now 118 times more than
that of 10 years ago, secured the country's position as the world's top
wind energy provider, Liu said.

Liu also said that China, now the world's leader in both wind power and
hydropower capacity, witnessed soaring growth in other clean energy
sectors in the same period. Its solar photovoltaic power capacity surged
by more than 50 percent each year.

Liu, also general manager of the country's largest grid operator, said
China will continue to optimize its energy structure by tapping new
energy sources, in a bid to secure future energy supply.

CEC also advised at the summit that China should construct a strong and
smart power grid to back up the development of clean energy in the
country, as well as building a market mechanism to help new energy
sectors boom.
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Don't repeat our mistakes on dam building, US urges Asia

(Sorry for x-postings, this is definitely relevant for Africa)

Don't repeat our mistakes on dam building, US urges Asia
Corinne Purtill
chinadialogue, 20.12.2012
www.chinadialogue.net/article/show/single/en/5505-Don-t-repeat-our-mistakes-on-dam-building-US-urges-Asia

Hydropower advocates point to the US as a reason to press ahead with
controversial plans, but it is still spending time and money fixing
past mistakes.

When confronted with criticism of proposed dams, hydropower boosters
in Asia and beyond have often pointed to the example of American
hydropower. If the US dammed their rivers, the argument goes, then why
shouldn�t we?

�Look at all the hydropower in the world,� said Viraphone Viravong, a
vice minister in Laos�s Ministry of Energy and Mines, at an October
forum on that country�s controversial dam plans. �If [these dams] are
so bad, why don�t you decommission all of them?�

In an attack on opponents of Chinese dam plans in the country�s water-
rich south west in May, Zhang Boting, deputy secretary general of the
China Society for Hydropower Engineering, also pointed to the US to
show that dam cascades were common practice, stating (incorrectly)
that the Tennessee River alone has 70 hydroelectric dams.

The US has learned quite a lot during a century of dam building. While
many projects have yielded valuable energy, flood control and
irrigation benefits, hydropower advocates abroad often fail to note
how much money and effort the US has spent undoing the damage of
poorly conceived dams.

The US demolished its 1,000th dam in 2011, with 430 removed just in
the last decade. Removing dams is expensive � sometimes astonishingly
so � but government and environmental leaders alike say that some dams
prove simply too harmful to keep.

To countries just beginning to experiment with large-scale hydropower,
US scientists, environmentalists and government officials all caution:
don�t make the same errors we did.

"We've learned some hard lessons about what happens when you make
certain infrastructure decisions,� US secretary of state Hillary
Clinton told a gathering of Mekong region leaders in July. �I�ll be
honest with you, we made mistakes.�
History of US dam-building

After China, the US is the most dammed nation on earth. There are
about 79,000 dams in the US Army Corps of Engineers� national
inventory, as well as many smaller projects that don�t meet the Corps�
minimum size requirements for listing. Some 2,500 dams produce
hydropower.

The twentieth century was a golden era of dam building in the United
States. �Every stream should be used to the utmost,� wrote then-
president Theodore Roosevelt in 1908, and within decades the US
embarked on a dam-building binge that placed barriers on virtually all
of the country�s main rivers.

This era gave birth to the country�s two most valuable sources of
hydropower: Hoover Dam, completed on the Colorado River in 1936, and
the Columbia River�s Grand Coulee Dam, finished in 1942. The dams
remain the country�s largest hydropower producers (proof, many critics
of new dams contend, that the best sites were taken long ago.)

Starting in 1960s, however, dam building ran out of steam. A raft of
federal legislation, such as the Wild and Scenic River Act of 1968 and
the National Environmental Policy Act of 1969, forced developers to
take rivers� ecological benefits into account before plowing ahead
with construction.

The US government also had to contend with a public less tolerant of
dams� high construction costs and increasingly concerned with
environmental protection.

�We went on this dam building binge in the early mid 1900s, and then
we realised, �Wow, we�ve dammed most of our best rivers and that comes
with serious costs,�� said Amy Kober, spokeswoman for the
environmental group American Rivers.

The trouble with dams

Dams, by definition, turn rivers into reservoirs. This has profound
ecological implications.

Changes in sediment patterns can have consequences thousands of miles
in either direction of a dam. A few degrees� temperature change can
destroy whole ecosystems. Blocked fish migration can be disastrous for
the species themselves and the humans who depend on them for sustenance.

A legend among some Native American tribes in the Pacific Northwest
holds that the Elwha River�s salmon were once so plentiful a man could
cross the river by walking on the fishes� backs. The river has lost
some 90% of its salmon since it was dammed in the early twentieth
century.

In addition, as imposing as a concrete behemoth like Hoover Dam may
seem, dams in fact have a limited lifespan. Maintaining them can be
staggeringly expensive � and as decades pass, it can be increasingly
hard to identify the federal, state or local entity responsible for
its care.

�We�ve ended up with a lot of dams that aren�t serving economic needs
anymore but nobody�s really responsible for them,� said Jane C. Marks,
a professor at Northern Arizona University who helped rehabilitate
Arizona�s once-dammed Fossil Creek. �There are rivers that are damaged
for really no good reason.�
If the last century was a golden age of dam building, the early part
of the twenty-first century has been a golden age of dam dismantling.

�There is a willingness in this country� to reevaluate some of the
benefits versus the costs of some facilities,� said commissioner
Michael Connor of the US Bureau of Reclamation, which oversees water
management in the US and built many of the last century�s dams.

The current trend toward dam removal began with the Edwards Dam on the
Kennebec River in the northeastern state of Maine. Built in 1837 for
hydropower and navigation, the dam ruined fish stocks and transformed
the once-lush region into a symbol of industrial decay. The mills
along the river eventually closed, rendering its small amount of
hydropower generation obsolete.

When the dam�s federal license came up for renewal in 1993, a
coalition of environmental groups, state and federal agencies lobbied
hard for the dam�s removal. After a decade of intense legal wrangling,
the dam was taken down in 1999 and the river successfully rehabilitated.

In September 2011, the US launched its most ambitious dam demolition
to date � the US$325 million (2 billion yuan) removal of the Elwha
River and Glines Canyon dams, the dams that decimated the once-
abundant salmon of the Olympic Peninsula.

An era of smarter dams?

No one is suggesting that all US dams should be removed. Hydropower is
the second-largest source of renewable energy in the US after biomass.
Instead of looking for new sites to build dams, the Bureau of
Reclamation is looking for ways to extract more hydropower from
existing facilities, Connor said.

Modern technology also enables engineers to build smarter dams than
their twentieth-century predecessors � and to be more prudent in
choosing whether to build in the first place.

�Countries that are considering new dams for hydropower generation
should make careful consideration of the damage that can and will be
inflicted upon the environment and livelihoods of many people,� said
Rupak Thapaliya of the conservation-minded Hydropower Reform
Coalition. �While the intentions of many governments may be good, the
actions may not always be based on sound science and that is very
important.�

The architects of last century�s dams worked in an era when mankind
was fully confident of its dominion over nature. Today, science is
making a very different case � one planners should take to heart.

�The lesson for China and Brazil is just: learn from what we�ve done,�
said Marks of Northern Arizona University. �You�re developing in a
different context � in a world where we�ve realised that resources are
finite.�
________________________________________________

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________________________________________________

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Don't repeat our mistakes on dam building, US urges Asia

Don't repeat our mistakes on dam building, US urges Asia
Corinne Purtill
chinadialogue, 20.12.2012
www.chinadialogue.net/article/show/single/en/5505-Don-t-repeat-our-mistakes-on-dam-building-US-urges-Asia

Hydropower advocates point to the US as a reason to press ahead with
controversial plans, but it is still spending time and money fixing past
mistakes.

When confronted with criticism of proposed dams, hydropower boosters in
Asia and beyond have often pointed to the example of American
hydropower. If the US dammed their rivers, the argument goes, then why
shouldn't we?

"Look at all the hydropower in the world," said Viraphone Viravong, a
vice minister in Laos's Ministry of Energy and Mines, at an October
forum on that country's controversial dam plans. "If [these dams] are so
bad, why don't you decommission all of them?"

In an attack on opponents of Chinese dam plans in the country's
water-rich south west in May, Zhang Boting, deputy secretary general of
the China Society for Hydropower Engineering, also pointed to the US to
show that dam cascades were common practice, stating (incorrectly) that
the Tennessee River alone has 70 hydroelectric dams.

The US has learned quite a lot during a century of dam building. While
many projects have yielded valuable energy, flood control and irrigation
benefits, hydropower advocates abroad often fail to note how much money
and effort the US has spent undoing the damage of poorly conceived dams.

The US demolished its 1,000th dam in 2011, with 430 removed just in the
last decade. Removing dams is expensive – sometimes astonishingly so –
but government and environmental leaders alike say that some dams prove
simply too harmful to keep.

To countries just beginning to experiment with large-scale hydropower,
US scientists, environmentalists and government officials all caution:
don't make the same errors we did.

"We've learned some hard lessons about what happens when you make
certain infrastructure decisions," US secretary of state Hillary Clinton
told a gathering of Mekong region leaders in July. "I'll be honest with
you, we made mistakes."
History of US dam-building

After China, the US is the most dammed nation on earth. There are about
79,000 dams in the US Army Corps of Engineers' national inventory, as
well as many smaller projects that don't meet the Corps' minimum size
requirements for listing. Some 2,500 dams produce hydropower.

The twentieth century was a golden era of dam building in the United
States. "Every stream should be used to the utmost," wrote
then-president Theodore Roosevelt in 1908, and within decades the US
embarked on a dam-building binge that placed barriers on virtually all
of the country's main rivers.

This era gave birth to the country's two most valuable sources of
hydropower: Hoover Dam, completed on the Colorado River in 1936, and the
Columbia River's Grand Coulee Dam, finished in 1942. The dams remain the
country's largest hydropower producers (proof, many critics of new dams
contend, that the best sites were taken long ago.)

Starting in 1960s, however, dam building ran out of steam. A raft of
federal legislation, such as the Wild and Scenic River Act of 1968 and
the National Environmental Policy Act of 1969, forced developers to take
rivers' ecological benefits into account before plowing ahead with
construction.

The US government also had to contend with a public less tolerant of
dams' high construction costs and increasingly concerned with
environmental protection.

"We went on this dam building binge in the early mid 1900s, and then we
realised, 'Wow, we've dammed most of our best rivers and that comes with
serious costs,'" said Amy Kober, spokeswoman for the environmental group
American Rivers.

The trouble with dams

Dams, by definition, turn rivers into reservoirs. This has profound
ecological implications.

Changes in sediment patterns can have consequences thousands of miles in
either direction of a dam. A few degrees' temperature change can destroy
whole ecosystems. Blocked fish migration can be disastrous for the
species themselves and the humans who depend on them for sustenance.

A legend among some Native American tribes in the Pacific Northwest
holds that the Elwha River's salmon were once so plentiful a man could
cross the river by walking on the fishes' backs. The river has lost some
90% of its salmon since it was dammed in the early twentieth century.

In addition, as imposing as a concrete behemoth like Hoover Dam may
seem, dams in fact have a limited lifespan. Maintaining them can be
staggeringly expensive – and as decades pass, it can be increasingly
hard to identify the federal, state or local entity responsible for its
care.

"We've ended up with a lot of dams that aren't serving economic needs
anymore but nobody's really responsible for them," said Jane C. Marks, a
professor at Northern Arizona University who helped rehabilitate
Arizona's once-dammed Fossil Creek. "There are rivers that are damaged
for really no good reason."
If the last century was a golden age of dam building, the early part of
the twenty-first century has been a golden age of dam dismantling.

"There is a willingness in this country… to reevaluate some of the
benefits versus the costs of some facilities," said commissioner Michael
Connor of the US Bureau of Reclamation, which oversees water management
in the US and built many of the last century's dams.

The current trend toward dam removal began with the Edwards Dam on the
Kennebec River in the northeastern state of Maine. Built in 1837 for
hydropower and navigation, the dam ruined fish stocks and transformed
the once-lush region into a symbol of industrial decay. The mills along
the river eventually closed, rendering its small amount of hydropower
generation obsolete.

When the dam's federal license came up for renewal in 1993, a coalition
of environmental groups, state and federal agencies lobbied hard for the
dam's removal. After a decade of intense legal wrangling, the dam was
taken down in 1999 and the river successfully rehabilitated.

In September 2011, the US launched its most ambitious dam demolition to
date – the US$325 million (2 billion yuan) removal of the Elwha River
and Glines Canyon dams, the dams that decimated the once-abundant salmon
of the Olympic Peninsula.

An era of smarter dams?

No one is suggesting that all US dams should be removed. Hydropower is
the second-largest source of renewable energy in the US after biomass.
Instead of looking for new sites to build dams, the Bureau of
Reclamation is looking for ways to extract more hydropower from existing
facilities, Connor said.

Modern technology also enables engineers to build smarter dams than
their twentieth-century predecessors – and to be more prudent in
choosing whether to build in the first place.

"Countries that are considering new dams for hydropower generation
should make careful consideration of the damage that can and will be
inflicted upon the environment and livelihoods of many people," said
Rupak Thapaliya of the conservation-minded Hydropower Reform Coalition.
"While the intentions of many governments may be good, the actions may
not always be based on sound science and that is very important."

The architects of last century's dams worked in an era when mankind was
fully confident of its dominion over nature. Today, science is making a
very different case – one planners should take to heart.

"The lesson for China and Brazil is just: learn from what we've done,"
said Marks of Northern Arizona University. "You're developing in a
different context – in a world where we've realised that resources are
finite."
________________________________________________

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Wednesday, December 19, 2012

China Is Top Dam Builder, Going Where Others Won't

China Is Top Dam Builder, Going Where Others Won't
By By DENIS D. GRAY and ELAINE KURTENBACH Associated Press
TATAY RIVER, Cambodia December 19, 2012 (AP)
http://abcnews.go.com/International/wireStory/china-top-dam-builder-18012337?singlePage=true#.UNIDzXd5hkg

Up a sweeping jungle valley in a remote corner of Cambodia, Chinese
engineers and workers are raising a 100-meter- (330-foot-) high dam over
the protests of villagers and activists. Only Chinese companies are
willing to tame the Tatay and other rivers of Koh Kong province, one of
Southeast Asia's last great wilderness areas.

It's a scenario that is hardly unique. China's giant state enterprises
and banks have completed, are working on or are proposing some 300 dams
from Algeria to Myanmar.

Poor countries contend the dams are crucial to bringing electricity to
tens of millions who live without it and boosting living standards.
Environmental activists and other opponents counter that China, the
world's No. 1 dam builder, is willing and able to go where most Western
companies, the World Bank and others won't tread anymore because of
environmental, social, political or financing concerns.

[EDITOR'S NOTE — This story is part of "China's Reach," a project
tracking China's influence on its trading partners over three decades
and exploring how that is changing business, politics and daily life.
Keep up with AP's reporting on China's Reach, and join the conversation
about it, using #APChinaReach on Twitter.]

"China is the one financier able to provide money for projects that
don't meet international standards," said Ian Baird, an assistant
professor of geography at the University of Wisconsin who has worked in
Southeast Asia for decades. "You go to China if you want to have them
financed."

The consequence, critics say, is a rollback to an era of ill-conceived,
destructive mega-dams that many thought had passed. The most recent
trend is to dam entire rivers with a cascade of barriers, as China's
state-owned Sinohydro has proposed on Colombia's Magdalene River and the
Nam Ou in Laos, where contracts for seven dams have been signed.

Viewed by some in the developing world as essential icons of progress,
dams in countries as far apart as Ecuador, Myanmar and Zambia have
spearheaded or reinforced China's rising economic might around the
world. They are tied to or put up in tandem with other infrastructure
projects and businesses, and power generation equipment ranks as China's
second-largest export earner after electrical machinery and equipment.

In energy-starved Cambodia, trade with China has risen to 19 percent of
GDP from 10 percent five years ago, according to an Associated Press
analysis of International Monetary Fund data.

The year-old $280 million Kamchay Dam in Cambodia's Kampot province was
the largest ever foreign investment when approved as well as a political
flag-carrier for Beijing. It has been hailed by both governments as a
"symbol of close Chinese-Cambodian ties."

Cambodia's electricity demand grew more than 16 percent a year from 2002
to 2011, with shortfalls largely met through costly oil imports, said
Bun Narith, a deputy director general in the Ministry of Industry, Mines
and Energy. Only 14 percent of rural homes have electricity, one of the
lowest levels in Southeast Asia.

"We have no choice," Bun Narith said. "Hydropower is the priority, and
the Chinese have the initiative and capability, both financial and
technical."

The 20 hydro dams built, being constructed or under study in Cambodia,
the bulk of them by the Chinese, would lift Cambodia out of literal
darkness and make it energy self-sufficient, he said. "We should have a
win-win policy, a balance between environment and energy. After all,
electricity is also a basic human need."

Electric rates have fallen in Kampot town since the opening of the
nearby Kamchay Dam, but they remain high.

"Everybody believed that after the dam is completed, there will be extra
power to use in Kampot and the price will be much cheaper, but in fact
there is not much change," taxi driver Prum Virak said.

He said his house is without power three to four hours every day. The
price of electricity has dropped to 920 riel (23 cents) per
kilowatt-hour from 1,100 riel six months earlier when power was being
imported from Vietnam.

In Myanmar, where China may build as many as 50 dams, one re-ignited an
ethnic insurgency in 2011 and fanned a wider, smoldering anti-Chinese
backlash. Mega-dams in Africa and Latin America have also sparked
sometimes violent protests.

The Myitsone dam in Myanmar would have displaced thousands and flooded
the spiritual heartland of the Kachin ethnic minority, which cited the
project as one reason for again taking up arms.

The government abruptly cancelled it earlier this year, a warning shot
that China must clean up its image, if not its act, to avoid both
political and economic fallout, analysts say.

The rise of China as a dam-building power began in the early 2000s as
its companies beat out then dominant Western competitors and just as
anti-dam lobbyists were celebrating victories over the World Bank, until
then the leading international dam financier. In the United States,
where the golden era of dams peaked in the 1960s, scores are being
decommissioned.

The industry, shepherded by the World Commission on Dams, was moving
toward setting higher, mandatory standards to mitigate the negative
impacts of large dams — environmental degradation, uprooting of
communities, depletion of aquatic life — and maximize their positives:
flood prevention, irrigation of farmlands, relatively clean energy for
homes and industry.

"The Chinese are now definitely diluting the standards debate. We're
back to talking about basics," said Grace Mang, who monitors China's dam
industry for the U.S. -based environmental group International Rivers.
"There is a pattern of projects that would have been delayed, maybe for
decades, or dropped, coming back on line with the assistance of Chinese
companies and banks."

Among such projects:

— Nepal's West Seti dam, which would force some 10,000 poor villagers
from their homes in a biodiversity-rich area. It hung in limbo after
Australia's Snowy Mountain Engineering Corp. failed to attract
international funders, and the Asian Development Bank pulled out because
the dam didn't meet its standards. Six months after the cancellation,
the Chinese took over the project.

— A number of dams being built inside or adjacent to nature reserves,
including Ghana's Bui Dam and two proposed on the Patuca River in
Honduras, where a U.S. developer earlier pulled out for environmental
reasons.

— The 1,500-megawatt Coca Codo Sinclair Dam, Ecuador's largest ever
infrastructure project, which would encroach on a vast rainforest
between the Andes and the Amazon and possibly dry up the country's
highest waterfall, located in a UNESCO reserve.

— Ethiopia's Gibe III dam, Africa's largest. Protesters gathered at the
Chinese Embassy in neighboring Kenya last year to denounce Chinese
companies involved in the project, which they said would endanger the
livelihoods of hundreds of thousands of downstream farmers. Ethiopian
officials defend it, saying less than 2 percent of the rural population
has access to electricity.

The Chinese are taking some steps to improve their image. Sinohydro
Corp., which says it controls half the global market for hydropower
projects, is expected to release an environmental policy soon and
dispatch public relations teams to its offices worldwide. An expert from
China's Institute for International Economic Research recently toured
Southeast Asia to investigate problems caused by Chinese dams.

The Export-Import Bank of China, the major dam financier, has made some
efforts to improve implementation of projects it backs. In a pattern
found in other African countries, the Belinga dam planned within Gabon's
Ivindo National Park was to power other Chinese enterprises including a
mine for iron ore to be shipped to China via a Chinese-built railway and
seaport. However, the Exim Bank suspended funding for the dam, citing
the national park as one reason.

"The Chinese are seeking a Chinese way of operating at international
environmental standards rather than have international standards imposed
on them," Mang said.

The Chinese are virtually silent on even such seemingly positive
developments, reflecting a persistent lack of transparency on the issue.

The Associated Press sought comment for more than six months from major
dam contractors, including Sinohydro, Guodian, China Three Gorges and
China Southern Power, calling and submitting written interview requests.
The companies provided Internet links to background information or
reports about projects in some cases. But most companies didn't respond
at all, and those that did rejected requests for answers to specific
questions.

Requests for comment on allegations of corruption associated with dam
projects were either rejected or failed to draw a response from the
Commerce Ministry, Foreign Ministry and the National Development and
Reform Commission.

China, the world's largest producer of hydropower, has honed its dam
building skills at home, but experts say that its companies build to
varying levels of quality abroad depending on what the clients demand.

"My sense is that when the Chinese build a dam overseas, they give you
the standards (the local officials) insist on," said Kenneth Pomeranz,
an expert on water issues at the University of Chicago. "When
governments say, 'We want it done right,' they know how to do that too."

Brian Richter, of the U.S.-based Nature Conservancy, said the Chinese
believe it is not their role to set environmental and social
regulations, but many countries in which they operate don't have the
capacity to enforce proper ones "so you end up with nobody paying
attention." And there's corruption.

Cambodia seems an apt example, and in particular Koh Kong province,
dubbed the "battery of Cambodia." It is remote, populated mostly by
poorly educated ethnic minorities and dominated by the government's
business cronies, who resort to brutal tactics with scant scrutiny by
activist groups.

"They can basically do what they want down there. It's just the Wild
West," said Marcus Hardtke, a German forestry expert with detailed
knowledge of the area. He said even international environmental groups
have remained largely quiet to avoid clashing with the autocratic
government of Prime Minister Hun Sen.

One dam has been built in Koh Kong, three more are under construction
and another — the Cheay Areng — was recently approved despite heavy
opposition.

The Areng was rejected for funding in a 2007 Japanese government study
as having a very low rate of economic return, and a Chinese company,
China Southern Power Grid, pulled out of the project on technical and
possibly environmental grounds. Company engineers reportedly cited the
need to build a sloping, 24-kilometer-long tunnel to the first turbine
because the valley below the dam was too flat.

Additionally, the Areng Valley — regarded as a "biodiversity jewel" with
great ecotourism potential — would be ravaged not only by the reservoir
but by access roads and transmission lines. The area contains perhaps
Cambodia's most profuse wildlife including the world's largest
population of almost extinct Siamese crocodiles. Some 1,000 villagers
are facing eviction.

Opponents believe the seemingly illogical trade-offs can be explained by
kickbacks, profit-sharing from highly lucrative illegal logging in the
area and a general Chinese push into Koh Kong that includes clearing an
area seven times larger than Manhattan for a Chinese-leased seaside
pleasure city, having displaced more than 1,000 families from their homes.

Son Chhay, one of the few opposition members in Parliament, said that
Chinese-Cambodian dam contracts are simply geared to making profits for
the parties involved rather than generating low-cost electricity for the
country.

"The Chinese have a funny way of doing deals in Cambodia. Construction
costs are inflated by some 300 percent, and the profits shared," Son
Chhay said. The Cambodian government declined to comment on his claims.

The government's belief in the necessity of the projects is echoed by Lu
Shi Long, the chief engineer at Tatay dam, set for completion in 2014 by
the China National Heavy Machinery Corporation.

"The construction of this hydropower station is beneficial for the
development of Cambodia's economy and the improvement of Cambodian
living standards. It's also a great opportunity for Chinese companies,"
he said. "As an engineer, I am proud of this project."

As he speaks, some of the 2,000 workers, 800 of them Chinese, swarm over
the vast dam wall, smoothing the rocky surface before a concrete facing
will be applied. Relays of trucks ferry stones from a quarry gouged out
of a hillside. The site is surrounded by a sea of tropical green.

Illegal loggers ring the site, having all but wiped out stands of
rosewood, the highly prized hardwood smuggled to China's furniture makers.

Improvements won't come, said the Nature Conservancy's Richter, until
sustainable standards can be verified by an independent body.

"The industry as a whole recognizes that there's a need, but the playing
field has shifted and the Chinese companies are by far the dominant
players," he said. "The future depends on them, for better or worse."


Kurtenbach reported from Shanghai. Associated Press writer Sopheng
Cheang in Phnom Penh, Cambodia, and researcher Fu Ting in Shanghai
contributed to this report.

EDITOR'S NOTE _ This story is part of "China's Reach," a project
tracking China's influence on its trading partners over three decades
and exploring how that is changing business, politics and daily life.
Keep up with AP's reporting on China's Reach, and join the conversation
about it, using #APChinaReach on Twitter.
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Part-Time International Rivers Digital Associate Job Posting

Join the global movement for healthy rivers and human rights!

International Rivers believes in the power of people to create a more just and sustainable world. We rely on a dedicated staff of decision-makers, experienced campaigners, communicators and technology specialists to connect and empower our global network of supporters, activists, advocates and members. To keep us on track, International Rivers is seeking a highly-motivated, part-time Digital Associate to join our Digital Department.

You (our potential new staff person) are:
  • Tech savvy, and know how to maximize the vast resources available to help you do your work (including Lynda.com, and International Rivers' own server and Intranet plus our fantastic staff at your disposal).
  • Patient and a great teacher, able to meet people wherever they are on the wide spectrum of technological comfort and ability.
  • Knowledgeable about both Mac and PC systems, proprietary and open source software and Windows Server.
  • You have worked with websites before, hopefully even with Drupal, and know what a Constituent Relationship Management system is (or will after a little research).
  • Adaptable and able to prioritize. You don’t get flustered by competing priorities and know how to triage requests for assistance with other projects on your list.
  • Interested in human rights and the environment, and might even have a personal river story to tell.
Are you our new Digital Associate? If you have technological skills, the ability to teach, a good sense of humor and an interest in learning more about leveraging technology to protect human rights and the environment, then please the full job description at www.internationalrivers.org/node/7772 to learn more.

Thursday, December 13, 2012

China's risky overseas dam building in Burma and beyond

China's risky overseas dam building in Burma and beyond
by Grace Mang, chinadialogue, 13.12.2012
http://www.chinadialogue.net/blog/5486-China-s-risky-overseas-dam-building-in-Burma-and-beyond/en

China is grappling with the social and environmental risks of building
300 dams in 66 countries, with a large number in south-east Asia.

Today, Chinese companies dominate the international hydropower market.
Over the past few years, China has successfully exported its large
dam-building expertise to the world. International Rivers is currently
aware of some 300 dam projects in 66 countries in which Chinese
companies and financiers are involved.

More than two-thirds of these dams are large hydropower projects with a
generating capacity of over 50 megawatts. Approximately 40% of these
projects are located in south-east Asia and 15% in Africa. The
geographical spread mimics the regional distribution of Chinese overseas
investment.

With the Chinese overseas dam industry's ever-increasing global
presence, International Rivers and its partners around the world have
been working since 2007 to better understand China's global role in
hydropower development. Through our report "New Great Walls – An
Activist Guide to Chinese Overseas Dam-Building Industry", revised and
republished in November, we have sought to share information with
communities impacted by Chinese dam building.

While China has not turned out to be the rogue dam builder that many
feared it might be, Chinese dam builders are coming late to the game and
face heightened environmental and social risks when operating overseas.

First, Chinese companies often operate in countries that have weak
environmental protection and social safeguards. For example, in Burma,
the government did not require any environmental approvals for the 6,000
megawatt Myitsone Dam. In such cases, Chinese companies cannot rely on
local legislation to ensure compliance with international laws and
standards.

Second, until very recently, Chinese dam builders have lacked any clear
environmental and social policy standards consistent with international
best practice for their overseas operations.

Third, many Chinese companies lack experience and are ill-prepared to
adequately deal with community grievances in the host countries and the
scrutiny of an independent media. When confronted with local opposition
or negative reporting, Chinese companies have tended to be defensive or
dismissive, confirming perceptions that they operate in a
non-transparent manner.

And, finally, in some cases strengthening bilateral relations between
China and the host country has meant that social and environmental
considerations of dam projects are an afterthought.

However, Chinese dam builders have made it clear that their aim is to be
a responsible global actor and, in recent years, civil society has been
fundamental in helping to shape the pathway for Chinese dam builders to
get there.

Sinohydro forging new environmental path

Sinohydro, the world's largest hydroelectric company, is engaged in a
dialogue with Chinese and international NGOs, and has prepared an
environmental policy that puts it at the forefront of the international
hydropower industry. Sinohydro has adopted all the World Bank safeguard
policies, including those relating to indigenous people, resettlement
and the environment, as its minimum standard.

It has also identified a number of "no-go" zones for hydropower
development, including World Heritage areas and the habitats of
internationally protected species. And it has committed to establishing
grievance and complaints mechanisms for its overseas projects. Of
course, the challenge will be in policy implementation, which will
require a fundamental change in the way Sinohydro does business.

Chinese government agencies have also issued guidelines for foreign
investors to protect the environment and respect local communities in
their host countries. Efforts are also under way that would see the
Chinese government go beyond what any western country has done to
address the social and environmental impacts of its companies operating
overseas.

The Ministries of Commerce and Environmental Protection are currently
drafting guidelines for the environmental impacts of Chinese companies
operating abroad, which will go some way to establishing a minimum
standard regardless of how weak host-country laws may be.

Civil society groups have also been directly engaged in pressuring
Chinese dam builders to pull out of destructive dam projects. After
protests by local communities and NGOs, Chinese companies and financiers
had to suspend projects in Burma and Gabon, and even withdraw from their
operations in Cambodia.

Grace Mang is China Programme Director at the NGO International Rivers
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Wednesday, December 12, 2012

Fwd: Wrong information in article circulated by list

FYI... 

Begin forwarded message:

From: Richard Thomas <ricthom61@yahoo.com>
Date: December 12, 2012 12:31:06 PM PST
Subject: Wrong information in article circulated by list
Reply-To: Richard Thomas <ricthom61@yahoo.com>

To whom it may concern:
 
I received an article today (12/12/12) from the Africa Dams List about an article from the "Oxford Univ. China Africa Network", which stipulated that "the author of this article won the 2012 Global Water Forum Emerging Scholars Award". This is incorrect. This article was one of the finalists, not one of the winners (http://www.globalwaterforum.org/emerging-scholars-award/). Please correct this misinformation for the sake of the three winners of this important award.
 
Thank you and regards,
 
R. Thomas 

Big is beautiful: Megadams, African water security, and China’s role in the new global political economy

from Oxford Univ. China Africa Network. (References online)

http://oucan.politics.ox.ac.uk/index.php/blog/14059-big-is-beautiful-megadams-african-water-security-and-chinas-role-in-the-new-global-political-economy

Big is beautiful: Megadams, African water security, and China�s role
in the new global political economy

16-Oct-2012

Big dams have long fascinated scientists and politicians alike,
sitting at the intersection of water security, modernisation
strategies and nationalism. They began their ascent in the West �
remember Roosevelt's Tennessee Valley Authority � but became popular
in developing countries seeking to meet the triple challenge of state-
building, nation-building and economic development. General Franco
used dams and a powerful water-bureaucracy to re-centralise control
over a fragmented, 'backward' nation after the Spanish civil war.
Nehru saw dams as the "modern temples of India" lifting hundreds of
millions out of poverty through spectacular multiplier effects in
industry and irrigated agriculture. And Gamal Abdel Nasser advanced
his revolutionary "second Egyptian independence" through the Aswan
Dam: Africa's biggest infrastructure project controlled the Nile flood
for the first time in history and symbolically catapulted Egypt into
the club of advanced nations.

Big dams were believed to magically transform barren wastelands into
fertile acreage, elevating the nation and integrating, through
irrigation and electrification, the domestic political economy. The
World Bank provided the ideological and financial backing for the
construction of hundreds of megadams across Latin America, Africa and
Asia. Yet from the 1970s onwards, dams as development instruments were
increasingly contested. Opponents exposed huge corruption scandals
that contributed to the systematic overestimation of their benefits
and the neglect of their dark side. Paradigmatic cases like the Sardar
Sarovar in Western India4 forced the Bank to largely withdraw its
support for large-scale hydro-infrastructure: the displacement of tens
of thousands of people; devastating environmental damage to unique
ecosystems; and the undemocratic decision-making surrounding dams
triggered a re-think. Many assumed that big dams might be shipped to a
museum for 20th century illusions of development � with Western
funding drying up, their role in economic growth strategies seemed
over.Dujiang Wiers Hydraulic Project, China

Yet anno 2012, dams are staging an impressive comeback: hundreds of
new projects have commenced in the last few years. China, India and
Brazil � not coincidentally also the three most important rising
powers � are the world's top three dam-builders, each with domestic
megaprojects of its own, but also increasingly a proactive role in an
emerging global political economy of food and water. Beijing
especially is using its formidable technical expertise in hydro-
infrastructure and immense foreign reserves to resurrect dam-building
overseas: in half of all African countries, from the Sudanese desert
and the Ethiopian lowlands to the rivers of Algeria and Gabon, Chinese
engineers are involved in the planning, heightening and building of
more than 100 dams. The tens of billions of US dollars and thousands
of megawatts involved in these projects have so far remained off the
radar in the China-Africa debate6 but are possibly more consequential
for the future of the African continent than the exports of oil,
copper and other valuable resources.

As the global balance of power shifts eastwards, supply and demand
networks are restructured, resulting in tremendous pressures on
commodity prices and scarce resources. Dams are therefore no longer
merely central to the debate about economic development but also an
integral part of water and food security strategies. Food prices
especially have spiked, bringing riots in their wake; this has led
many to predict that land and water are becoming the world economy's
Achilles heel. Emerging powers are seemingly racing to secure the key
resources of the future.8 Big investments by Gulf Arab sovereign
wealth funds, purchasing strategies of land by South Korean and
Malaysian enterprises and China's involvement in African dam-building
cannot be seen in isolation from growing fears about how to ensure
water security in the 21st century.

The speed and scale with which this new global political economy of
water and food is taking shape is breathtaking. One emerging leader is
Beijing's Sinohydro, a state-owned giant claiming leadership in dam-
building with more than 50% market share of new dams erected around
the globe. Just in 2009, Sinohydro, which is lead by powerful Chinese
Communist Party loyalists, installed 20000MW of new hydropower
capacity outside China's borders. Its technical expertise is
undisputed, as is the extraordinary politico-financial backing given
by Beijing's key ministries and lending agencies so that Sinohydro can
lead China's "Go Out" strategy. Diplomats, bankers and technical
specialists are disseminating the message that China's economic
miracle relied on dazzling investment in infrastructure and that the
hundreds of dams that tame China's rivers have powered agricultural
and industrial growth rates of 10% per annum. Implicitly, the economy
and the ecosystems that feed into it are imagined as a machine that
needs to keep spinning at high speeds. Dams are argued to be a vital
switch in maintaining the machine's stability, controlling erratic
water flows and channelling it to productive ends in regions of
scarcity. It might not come as surprise that 7 out of 9 members of the
Standing Committee of the Chinese Communist Party's Politburo are
engineers.

Dams symbolise the merger of growing hard and soft power of China but
their return to prominence begs important questions about the
sustainability of the new model of growth and water security. Both on
the Chinese and on the African side there seems preciously little
interest in engaging with the criticisms of the 1980s and 1990s �
these emphasised how the benefits of big dams typically accrue to
politically influential groups with important transnational allies,
while the costs of displacement, shrinking biodiversity and
disappearance of traditional cultures fall on those outside the
political elite.10

Moreover, while Chinese-built megadams are trumpeted as the answer to
persisting water security crises in Africa, the truth is that hardly
any planning surrounding them actually takes environmental concerns
seriously. As my research in the Nile Basin shows, the impacts of
climate change are seldom factored into the building of hydro-
infrastructure and the new irrigation projects are consuming huge
quantities of water � with water intensive cash crops being exported
to wealthy economies. Instead of opting for environmentally
sustainable models of regional integration that prioritise water and
food security, some national governments maintain a simplistic view of
development and still see dams as major achievements, regardless of
their ecological impact.12 Thus, while the return of big dams may be
beautiful in the eyes of Sinohydro and the African regimes that it
partners with, their long-term contribution to water security in the
climate change era remains deeply questionable.

The author of this article won the 2012 Global Water Forum Emerging
Scholars Award.
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Tuesday, December 11, 2012

Zimbabwe: China Exim Debt Holds Up Power Project

Zimbabwe: Debt Holds Up Power Project
By Martin Kadzere
The Herald, 10 December 2012
http://allafrica.com/stories/printable/201212100384.html

THE Kariba South hydro expansion programme hangs in the balance after it
emerged that Sino Hydro, a company awarded the tender for the project,
might not get funding from a Chinese bank as Zimbabwe is in arrears with
the institution.

According to a report by the Parliamentary Portfolio Committee on Mines
and Energy, Zimbabwe owes Chinese Exim-Bank US$27 million for
agricultural equipment acquired through the Industrial Development
Corporation and Farmers' World. Government has now directed the national
power utility, Zesa Holdings, to pay the debt.

"Government should be encouraged to pay this debt of US$27 million so
that the project of expanding Kariba South can take off the ground,"
said the report.

"Sino has indicated that it will not release funding for Kariba South
from the Chinese Eximbank until the US$27 million has been paid off."

Energy and Power Development Minister Elton Mangoma referred all
questions to Finance Minister Tendai Biti, who could not be reached by
the time of going to print.

The extension of Kariba South station was scheduled to start early next
year.

It would add 300 megawatts to the national grid.

Government will soon announce a contractor for the expansion of Hwange
Power Station.

The two last bidders for the project are finalising their commercial
evaluations, said Minister Mangoma.

Zimbabwe generates an average of 1 200MW, against a demand of 2 200MW.
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Monday, December 10, 2012

Water/dams deal irks Lesotho's new rulers

Mail and Guardian

http://mg.co.za/article/2012-12-07-00-water-deal-irks-lesothos-new-rulers


07 Dec 2012 00:00 - Caswell Tlali

WATER DEAL IRKS LESOTHO'S NEW RULERS

South Africa has been accused of putting undue pressure on a weak
government to extract an unfair deal. Caswell Tlali reports.

Controversy continues to stalk the bilateral Lesotho Highlands water
scheme because Lesotho's new coalition government wants to scrap
"prejudicial" sections of the country's agreement with South Africa
governing the construction of the proposed R9-billion Polihali dam.

The 1999 agreement, unearthed by the Lesotho Times last week, clearly
reflects South Africa's desire for greater control over the crucial
infrastructural project, which supplies water to industrial and
domestic consumers in Gauteng and beyond.

It was signed when the Lesotho government was almost paralysed and
South African troops were still stationed in the kingdom after the
invasion sponsored by the Southern African Development Community
(SADC) a year earlier.

Sources in the Lesotho Cabinet told the Mail & Guardian last week that
the government was uncomfortable with the agreement its predecessor
had signed with South Africa on the second phase of the giant water
project.

But Timothy Thahane, Lesotho's water affairs minister, would only say
that his government was studying the agreement and that it had not
been ratified.

However, Lesotho Prime Minister Thomas Thabane told a media conference
after meeting President Jacob Zuma in October that he had asked him to
allow some aspects of the project to be reviewed.

Phase two will see the construction of Polihali Dam in Lesotho's
Mokhotlong district, which will augment the water in Lesotho's Katse
Dam, from where it will be channelled to the Vaal River.

Expenditure

A reading of the contentious agreement shows why it has irked
Thabane's six-month-old government. It appears to trump a bilateral
treaty signed in 1986, plainly stating that, where the terms of the
agreement and the treaty differ, "the meaning provided for in this
agreement" prevails.

Lesotho is known to be unhappy with the agreement's provision that
South Africa will provide services and other materials for the
Polihali Dam's construction without paying tax.

The 1986 treaty makes South Africa liable for taxes on all expenditure
related to the project. The net effect of the 1999 agreement is that
South Africa receives Lesotho's water tax-free.

South Africa pays between 35-million maloti (the maloti is on a par
with the rand) and M45-million a month in royalties for the water from
the Katse and Mohale dams.

In 1999, Lesotho also signed a controversial protocol in which it
agreed to refund South Africa all levies it paid during the
construction of the Katse and Mohale dams during phase one of the
project.

Lesotho repaid R341-million of taxes it levied between 1986 and 2000.
The principal amount was M186-million, but with 15% annual interest,
the country ended up paying M156-million more. The amount included
corporate, income and fringe-benefit taxes.

A further difference is that, under the treaty, the water project
belongs to Lesotho and South Africa is no more than a customer. Under
the 1999 agreement, the project is jointly owned by the two countries.

Resisted overtures

Initially, South Africa's interests were catered for by the joint
permanent technical commission, which later changed its name to the
Lesotho Highlands Water Commission, an oversight body with equal
representation from both countries.

The treaty also gave Lesotho the power to appoint the management of
the Lesotho Highlands Development Authority, the project's executive
arm. The 1999 agreement shifted that duty from the Lesotho government
to the commission.

Under the 1986 treaty, South Africa only controlled the tunnel from
the Lesotho border.

South Africa's apartheid rulers first began pressing Lesotho under the
government of Leabua Jonathan to enter into a joint water scheme, but
their overtures were resisted.

After the military coup in 1986, probably sponsored by South Africa's
apartheid government, the leader of the new military junta, Major
General Metsing Lekhanya, hurriedly signed the treaty amid speculation
that the South Africans were putting pressure on him.

Embarrassment

The 1999 agreement followed a post-election crisis in Lesotho when
opposition parties rejected the poll results and the armed forces
mutinied. The army commander and other senior officers fled to South
Africa. Accepting the argument that Lesotho had become ungovernable,
SADC voted to send in troops under South Africa's leadership.

The first warplane that entered Lesotho on September 22 1998 headed
straight for the Katse Dam. Sixteen Lesotho soldiers guarding the
facility were killed and replaced by South Africans.

South African and Botswana forces remained in Lesotho for three years,
during which the 1999 agreement was concluded.

A senior government official, who asked not to be named, told the M&G
that Lesotho was "still recovering from the embarrassment" of the
political chaos that climaxed in the invasion. "At that time Lesotho
did not have a strong voice at the negotiating table, with South
Africa or any other country. Political instability had rendered us
powerless," he said.

Thamae Lenka of the Maseru-based Transformation Resource Centre, a
local human rights advocacy organisation, said Lesotho had a
"fragmented, indecisive leadership that was vulnerable to external
pressure" and was "too feeble to stand up to South Africa".

But the perception of South African arm-twisting is challenged by
Nqosa Mahao, a University of South Africa law academic who was born in
Lesotho.

Arm's length

Mahao said South Africa "could not exercise leverage" in 1999 because
the ANC government's relations with the ruling party at that time were
poor.

"I personally doubt that South Africa had superiority at the
negotiations table in 1999. Even the then ruling Lesotho Congress for
Democracy kept the ANC at arm's length. That is common knowledge."

But South Africa undoubtedly has an intense interest in Lesotho's
water. Edna Molewa, the water affairs minister, lobbied for the
construction of Polihali Dam and South Africa will provide the
required R9-billion capital investment.

Construction is scheduled to kick off next year and 2018 has been set
as the completion date. The dam wall will be 165m high and the dam
will have a capacity of 2.2-billion cubic metres.

The Katse and Mohale dams transfer more than 40-million litres of
water into the Vaal River system a day and generate 72MW of
electricity for Lesotho.

The Vaal River is South Africa's most important water source,
supplying water to 60% of Gauteng's economy and nearly half the
residents of Gauteng and the Northern Cape.

Objections

The river also supplies water to Eskom's coal-fired power stations in
Mpumalanga, gold mines in North West and the Free State, and farmers
in Limpopo.

This will be the water project's third dam in a series of five that
will be completed in 2036 when the 50-year agreement between the two
governments expires.

On completion, the project will transfer more than two billion cubic
metres of water from Lesotho to South Africa annually.

The controversy over the 1999 agreement is not the only source of
tension between the two governments. Recently the M&G revealed that
South Africa was unhappy that Lesotho appointed a convicted fraudster,
Masupha Sole, to the water commission as a technical adviser.

Sole, former chief executive of the Lesotho Highlands Development
Authority, was sentenced in 2003 to 15 years in prison for receiving
bribes totalling R5-million from two international construction
consultancies.

After being paroled last year, he was appointed adviser to the
commission despite objections by Molewa and Lesotho's then main
opposition party, the All Basotho Convention, as well as the media.

Sputnik Ratau, spokesperson for South Africa's water affairs
department, referred the M&G's questions to the South African
representative at the water commission, Zodwa Dlamini. But he refused
to comment and said the South African high commissioner in Maseru,
Happy Mahlangu, was the person to answer questions. Mahlangu said the
questions should be put to the Lesotho government.

* Got a tip-off for us about this story? Email amabhungane@mg.co.za

The M&G Centre for Investigative Journalism (amaBhungane) produced
this story. All views are ours. See www.amabhungane.co.za for our
stories, activities and funding sources.
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Friday, December 7, 2012

Bloomberg: Esteves Backs $14 Billion Amazon Dam Itau Shuns


Esteves Backs $14 Billion Amazon Dam Itau Shuns: Brazil Credit

2012-12-04 14:15:32.674 GMT

By Blake Schmidt

Dec. 4 (Bloomberg) -- Billionaire Andre Esteves’ Banco BTG Pactual SA is helping fund construction of a 29 billion-real ($14 billion) dam opposed by Amazon indigenous groups after Brazil’s two biggest non-state banks opted not to take part.

BTG, based in Sao Paulo, is passing through 2 billion reais of a 22.5 billion-real government credit line granted to Norte Energia SA’s Belo Monte dam and will lend at a rate of as much as 3 percentage points above Brazil’s 5.5 percent long-term reference rate, according to a BTG official who asked not to be identified because he isn’t authorized to speak publicly. Haidian-based China Three Gorges Corp. sold 3 billion yuan ($482 million) of 20-year bonds to finance the world’s second-biggest dam on the Yangtze River at a yield of 4.15 percent in 2006.

While Brazil has repeatedly redesigned the dam project since the 1980s to reduce its environmental impact, and the Energy Ministry says the development will cut costs and help maintain economic growth, Belo Monte has sparked protests by indigenous groups, prompted a court-ordered suspension of construction and drawn opposition from James Cameron, the director of “Avatar.” Sao Paulo-based Itau Unibanco Holding SA and Banco Bradesco SA, located in Osasco, along with state-run Banco do Brasil SA chose not to participate.

“This is a project that will have a big environmental impact on the Xingu River, and that’s a risk that could be expensive for those who are offering credit,” Henrique Kleine, the chief analyst at Sao Paulo-based Magliano SA, said in a telephone interview.

New Markets

Record-low interest rates are prompting banks to move into new loan markets in search of higher returns, including longer- term financing for the 1 trillion reais in infrastructure needs the government estimates for Latin America’s biggest economy.

A BTG official who asked not to be identified because he wasn’t authorized to speak on the matter declined to comment.
Indigenous people won’t be removed from their villages for the Belo Monte project, which is “fundamental” to the country’s development, President Dilma Rousseff said in an August 2011 statement on the presidential website.

Norte Energia, a consortium controlled by state-run companies and pension funds including Rio de Janeiro-based Centrais Eletricas Brasileiras, said in an August statement the dam won’t “directly affect any Indian territory.”

“The indigenous communities living in the region have been consulted and their opinions respected in the elaboration of the project,” according to the statement on Norte Energia’s website.

Project Considerations

Banco de Brasil, Itau and Bradesco, Brazil’s three biggest banks by assets, all considered the project before deciding against it, Marcelo Perillo, financial director for Norte Energia, said in a telephone interview from Brasilia.

Itau had concerns over legal issues related to whether indigenous groups were properly consulted, according to a person familiar with the matter who asked not to be identified because he isn’t authorized to speak publicly on the matter. An Itau official who asked not to be identified citing bank policy declined to comment.

Bradesco opted out after evaluating the project based on the Equator principles, which are guidelines established by the World Bank for managing social and environmental issues in project finance, according to a person familiar with the discussions who asked not to be identified and isn’t authorized to speak publicly on the matter. A bank official who asked not to be identified citing bank policy declined to comment.

Equator Principles

The Equator principles were also a factor in Banco do Brasil’s staying out of the project, according to a person familiar with the decision who asked not to be identified because the talks are private. A Banco do Brasil official who asked not to be identified citing bank policy declined to comment.

Banks are searching for new loan markets after the central bank lowered the benchmark interest rate 5.25 percentage points since August 2011 to a record low 7.25 percent.

Yields on Brazil’s benchmark local bonds due in 2021 have tumbled 2.38 percentage points to 9.28 percent, according to data compiled by Bloomberg.

The extra yield investors demand to own Brazil government dollar bonds instead of U.S. Treasuries was unchanged at 153 basis points at 9:07 a.m. in New York, according to JPMorgan Chase & Co.

Default Swaps

The cost of protecting Brazilian bonds against default for five years fell one basis point to 109 basis points, according to prices compiled by Bloomberg. Credit-default swaps pay the buyer face value in exchange for the underlying securities or the cash equivalent if a borrower fails to adhere to its debt agreements.

The real gained 0.7 percent to 2.1081 per dollar, paring its decline this year to 11 percent. Yields on swap rates due in January 2014 fell four basis points to 7.13 percent.

Of the total credit line from state development bank BNDES, 14 percent is for social and environmental costs, the biggest portion for a project in the bank’s 60-year history.

Brazil’s Rousseff has been working on a buildup of power plants since her predecessor, Luiz Inacio Lula da Silva, named her energy minister in 2003. Brazil is spending 168 billion zreais to build 20 hydroelectric plants in the Amazon and power lines to faraway cities. The dam is a “social investment” that will help improve the quality of life of those living in the Amazon, Rousseff said in August 2011.

The 11,233-megawatt dam in Para state would generate enough to supply almost a third of Brazil’s 193 million residents when it is finished in 2019, Norte Energia says.

‘Sticky Issues’

Federal prosecutors in Para are processing 15 cases against Belo Monte, including some filed by environmental groups and indigenous leaders, according to an e-mailed response to questions from the federal prosecutor’s office.

A court ordered the suspension of dam construction in August after indigenous groups alleged they weren’t properly consulted. A higher court overruled the suspension, which lasted two weeks, and federal prosecutors in Para have appealed.

“These are sticky issues,” said Zachary Hurwitz, policy program coordinator at Berkeley, California-based International Rivers, which lobbied banks against funding the dam project. “Just from a standpoint of reputational risk, banks see tribes getting involved and that is too risky. Private banks don’t want to be associated with that.”

Chance to Expand

For BTG, founded by Esteves through the takeover of UBS Pactual in 2009, the project is a chance to expand its business from investment banking into project finance and develop its relationship with BNDES, Hurwitz said. BTG isn’t a signatory of the Equator Principles.

State-run Caixa Economica Federal, which is a signatory of the Equator Principles, is taking 7 billion reais of the BNDES credit line and passing it through to Norte Energia.

A Caixa press official didn’t respond to e-mails and phone calls seeking comment.

Tribes, peasant farmers and fishermen seized control of one of three Belo Monte construction sites Oct. 8, saying Norte Energia hasn’t followed through on a pledge to invest in communities affected by the project, in one of several protests against the dam. Norte Energia said in a statement it met with protesters and agreed to build health clinics and schools for indigenous groups.

The protests haven’t put the company behind schedule, said Perillo.

‘Different Reality’

Brasilia-based Norte Energia will fund the rest of the construction with capital from shareholders and as much as 500 million reais of tax-exempt infrastructure bonds to be sold by 2015, Perillo said. The company sold 1 billion reais of 180-day promissory notes in August, according to Brazil’s capital markets association, in a deal coordinated by BTG.

BTG’s participation is a sign that BNDES’s financing for social and environmental costs help make the project attractive to private banks, Perillo said.

“Even though people say no private banks support the development, there were various banks interested in participating,” he said.
Norte Energia’s 29 billion-real cost estimate on the dam is up from a figure of 16 billion reais quoted as recently as 2009 by Tribunal de Contas, a Brazilian court that oversees government spending. Norte Energia’s head of institutional relations, Joao Pimentel, said the 16 billion-real estimate wasn’t the company’s forecast, which has increased only by 3.1 billion reais since it won the bid, driven by social and environmental costs.

The rising outlays add to the risks for banks that finance the project, according to Magliano’s Kleine.

“There were various obstacles,” Kleine said. “And now the cost of Belo Monte is a different reality than it once was.”

--
~~~~~~~~~~~~~~~~~~~~~~~~~
Zachary Hurwitz
Policy Program Coordinator
+ 1 510 848 1155 x313 / skype: zacharyhurwitz
Fax: +1 510 848 1008
zachary@internationalrivers.org
www.internationalrivers.org
~~~~~~~~~~~~~~~~~~~~~~~~~
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Monday, December 3, 2012

Ethiopia's Renaissance Dam: A Mega-Dam with Potentially Mega-Consequences

http://thinkafricapress.com/ethiopia/nile-concerns-over-new-mega-dam-egypt-sudan

Ethiopia's Renaissance Dam: A Mega-Dam with Potentially Mega-
Consequences

Without greater oversight, Ethiopia's secretive new dam could have
disastrous environmental, social and political impacts.

3 December 2012

By Haydar Yousif

While Egypt was undergoing dramatic political changes last year,
Ethiopia was secretly moving to unveil �Project X� � a huge hydropower
dam it intends to build on the Blue Nile, 40 km from the Sudanese
border.

Political commentators, environmental experts and hydrologists have
all voiced concerns about the dam�s ecological impact, the strain it
might place on relations between the three eastern Nile nations, and
the financial burden of this mega-dam on Ethiopian citizens.

Now renamed the Grand Ethiopian Renaissance Dam, the project (due for
completion by 2015) is set to become the largest hydroelectric power
plant in Africa. The scale of the project is staggering: the plant
will be capable of producing almost double the electricity of Aswan
High Dam in Egypt, while its 63 billion cubic metre (bcm) reservoir is
double the size of Ethiopia�s largest natural lake. Crucially for
Ethiopia�s Nile neighbours, the filling of this huge reservoir is also
likely to greatly reduce the flow of water to Egypt and Sudan for
several years, and could even permanently alter the amount of water
those countries are able to draw from the river.
Details trickling through

The planning and implementation of this project has all been decided
behind closed doors. Its $4.8 billion contract was awarded without
competitive bidding, for example, to Salini Costruttori, an Italian
firm favoured by the ruling party; Salini is also building the
controversial Gibe III Dam on Ethiopia�s Omo River.

Furthermore, the nature of the project was kept under wraps until
after site preparation had already begun, to the great surprise of
regional governments, Nile planning agencies, and Ethiopia�s Western
donors. It was especially shocking to Norwegian agencies who were
working with the Ethiopian government on a similar project for the
same stretch of the Nile, now made obsolete by the Renaissance Dam.

This level of official opacity has worryingly prevailed beyond the
initial announcement of the project. Expert analysis that would
normally accompany such a titanic project has either not been
undertaken or kept characteristically secret. No environmental
assessment is publicly available for the project. And no steps were
taken before its launch to openly discuss the dam�s impacts with
downstream Nile neighbours Egypt and Sudan.
Do the environmental and social plans hold water?

The consequences for Ethiopia�s downstream neighbours could
potentially be catastrophic. The Renaissance Dam�s reservoir will hold
back nearly one and a half times the average annual flow of the Blue
Nile. Filling the reservoir � which could take 3 to 5 years � will
drastically affect the downstream nations� agriculture, electricity
and water supply. Evaporative losses from the dam�s reservoir could be
as much as 3 billion cubic metres per year.

The dam will also retain silt. The Ethiopian government argues that
this will be a net positive as it will increase the lifetime of other
dams downstream, particularly in Sudan where, for example, the
Roseires Dam has been nearly incapacitated by sedimentation. But what
about the life expectancy of the Renaissance Dam itself? This is a
serious issue for the dam�s viability, and there are no known plans
for watershed management or soil conservation to address it. In
addition, the retention of silt by the dam reservoir will dramatically
reduce the fertility of soils downstream. Sediment-free water released
from dams also increases erosion downstream, which can lead to
riverbed deepening and a reduction in groundwater recharge.

Some have predicted even more calamitous consequences of the dam�s
construction. The Grand Renaissance Dam site is in the Great African
Rift Valley near the Afar Depression, an area in which tectonic
turmoil is so great it could, according to some accounts, eventually
tear the continent in two. The dam could be at risk from damage by
earthquakes, yet no one knows if it has even been analysed for this
risk, or the largest earthquake it is being designed to withstand. The
failure of such a huge structure puts the more than 100 million people
living downstream at risk.

On top of that risk is that of �reservoir induced seismicity�. A dam
with a reservoir as large as this is not just vulnerable to seismic
events � it can cause them. Scientists believe that there have been
more than 100 instances on six continents of large reservoirs inducing
earthquakes. The most serious to date was China�s devastating
magnitude 7.9 earthquake in 2008, which some experts believe was
induced by Zipingpu Dam.
Holding back the tide of criticism

However, some of the most pressing concerns regarding the dam�s
construction are political. Although its timing coincided with Egypt�s
political upheaval, the sudden unveiling of the project nevertheless
resulted in an outcry. Egypt�s primary fears are a reduction of its
main water supply from the Nile, and diminished nutrients and sediment
essential for agriculture.

Towards the end of the late Prime Minister Meles Zenawi�s rule,
Ethiopia adopted a more aggressive stance over the Nile, moving
swiftly to build a number of large hydropower dams. However, tension
in the region regarding control of the Nile waters has not all be
centred on Ethiopia. In May 2010, five upstream Nile states (Ethiopia,
Kenya, Uganda, Rwanda and Tanzania) signed a Cooperative Framework
Agreement (CFA) to access more water from the Nile. The move was
strongly opposed by Egypt, which brandished a colonial-era treaty from
1929 asserting its exclusive rights to the Nile�s water supply.

With the Renaissance Dam, these tensions seemed to be coming to a
head. Following its announcement in March 2011, Egyptian authorities
were quick to lobby international support and strongly hinted that a
military response was not deemed disproportionate to protect such a
vital resource. Indeed, Wikileaks recently released documents
detailing a planned Egyptian attack on the dam from Sudan.

However, attitudes appear to have since softened, and dialogue was
opened last month between Egypt, Ethiopia and Sudan. In a bid to allay
Egypt�s wrath, the Ethiopian government proposed an International
Panel of Experts (IPoE) to review and assess the dam�s impacts on
downstream neighbours. The panel of ten consists of two members from
each of the three countries eastern Nile countries, plus four
international experts. Their names have not been released and their
meetings are behind closed doors, but they are expected to announce
their findings four months from now. This seems to have placated
Ethiopia�s neighbours for now. Egypt has toned down its opposition to
the dam, while President Omar al-Bashir of Sudan has even pledged
Sudanese support for the project.

Yet whatever the IPoE�s findings, the Ethiopian government seems
adamant the dam will continue. In September 2012, the Ethiopian
Ministry of Foreign Affairs declared that Ethiopia would never halt or
slow the construction of the dam due to external pressure, calling
into question the significance of the panel. Needless to say, many in
Sudan and Egypt still have serious concerns about the project.

Whatever the outcome of political arbitration, it remains
irresponsible for Ethiopia to build Africa�s biggest hydropower
project, on its most contentious river, with no public access to
critical information about the dam�s impacts � a flawed process which
can hardly result in a sustainable project. If the Ethiopian
government is serious about maintaining good relations with its Nile
neighbours, and if it truly wishes to develop projects that will carry
its people and the broader region into prosperity, it must begin by
allowing some light to penetrate this secretive development scheme.


About the Author
Haydar Yousif is a Sudanese hydrologist who has worked for 35 years on
water issues on the Nile.
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Ethiopia: rape and brutality, but UK aid continues

http://www.thesundaytimes.co.uk/sto/news/world_news/Africa/article1170357.ece

Ethiopia: rape and brutality but UK aid continues

The minister Justine Greening has been accused of covering up human
rights abuses
by Flora Bagenal

Published: 2 December 2012

� THE international development secretary, Justine Greening,
has been accused by an anthropologist of covering up human-rights
violations in Ethiopia. The anthropologist said he had witnessed
members of her department being told about the abuses.

Greening said in parliament last month that the Department for
International Development (DfID) could not �substantiate the
allegations of human-rights violations� allegedly carried out by the
Ethiopian government in the south, where an aggressive resettlement
programme is under way.

Will Hurd, an American academic, had translated during meetings in
January held by officials from DfID and USAid, the American
development agency, with communities in South Omo. Hurd insisted they
were clearly told about rapes, beatings and forced evictions and that
they promised to raise the issue with the government.

He accused Greening of covering up violations to avoid angering the
Ethiopian authorities, which have attacked aid agencies for
interfering in domestic affairs. �They are trying to cover for the
Ethiopian government. They have strategic ties and they are denying
the truth,� he said.

Britain gave �324m to Ethiopia last year, more than to any other
country, despite long-standing human-rights abuses.

The department has come under increasing pressure to investigate
allegations of mistreatment in tribal areas where the authoritarian
government has been launching ambitious plans for a dam and
agricultural development.

Hundreds of thousands of farmers and nomadic cattle herders have been
told they must leave their land and move to government-built villages,
where they have been promised better access to water, education and
healthcare.

The tribes say they have not been consulted and that the new sites are
unsuitable for agriculture or herding. They allege that resistance to
resettlement has been met with violence by police and the army.

In transcripts of meetings held by DfID and USAid, men and women from
the Mursi and Bodi people in South Omo are recorded describing the
ordeals they have undergone. �They [government soldiers] went all over
the place and they took the wives of the Bodi and raped them. Then
they came and they raped our wives, here,� said a man from the Mursi
tribe.

Others said they had been forced out of their homes by soldiers at
gunpoint. They also claimed food aid intended for Omo communities had
been held back by local officials. The DfID and USAid representatives
were recorded expressing concern about the allegations.

�Obviously we agree that it�s unacceptable, beatings and rapes and
lack of consultation or proper compensation,� said a DfID official,
who promised to raise the complaints �very strongly with the
government�. Since the meeting 11 months ago there is no evidence that
either organisation has put any public pressure on the Ethiopian
government.

Information from the mission was used to compile a report. In the
Commons, Greening said she was �considering� whether to make it
public; DfID has since said it will release the document.

�Donors supply money to Ethiopia with no strings attached,� said Felix
Horne, a consultant to Human Rights Watch (HRW). �Providing massive
amounts of aid is just increasing the repressive capacity of the
regime.�

Horne has spent months compiling testimonies from victims of the
resettlement programme. He said he has seen the suffering it has
caused: �We have anecdotal accounts of people being killed, subject to
arbitrary arrest, severely beaten and tortured.�

While DfID and other donors do not directly fund the resettlement
programme, they do fund local government officials, including teachers
and health workers who, according to HRW, are driving people off their
land and denying them access to services if they refuse to comply.

In September a farmer known as Mr O, from the Gambella region in
Ethiopia, began legal action against Britain over its role in the
resettlement campaign.

�Our people are suffering. Our people are dying. We are frightened of
the future and we are frightened of the government. Britain must stop
helping these abuses go on,� said another claimant.

A DfID spokeswoman said: �We have visited the South Omo region twice �
in January and again recently � and while we have been unable to
substantiate these specific claims, we are publishing the allegations
we heard and have raised this matter with the government of Ethiopia.

�We continue to monitor the situation and to discuss with the
government both these claims and how best to ensure the long-term
prosperity of these communities.�
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