Tuesday, May 29, 2012

Brazil's dirty dam plans in climate spotlight for Rio+20

(Sorry for cross postings)

Brazil takes centre stage
Nature Climate Change | Editorial
25 May 2012


Brazil's hosting of the much anticipated Rio+20 United Nations
Conference on Sustainable Development this month will put the country
in the climate change spotlight.


The Rio+20 conference (20�22 June 2012) will be held in Rio de
Janeiro, Brazil. It will focus on two main themes � development of a
green economy while fostering sustainable development and poverty
eradication, and the institutional frameworks necessary to achieve
these goals, including the strengthening of international
environmental governance. Areas identified for 'priority attention'
are employment, energy, sustainable cities, food security, and
sustainable agriculture, water, oceans and disaster readiness.

Brazil -- the fourth biggest greenhouse-gas emitter in the world --
has so far made limited progress in limiting emissions, and, as
discussed by Eduardo Fernandez Silva (page 379), the measures so far
announced under the National Policy on Climate Change Law (enacted in
December 2009) are unlikely to achieve much more. The intention of the
law is to set in place measures to reduce emissions. The authorities
hope that by 2020, emissions will have fallen to around 2005 levels.
Many question whether this target will be achievable in the absence of
attractive economic incentives for environmentally responsible
behaviour along with strong sanctions against misbehaviours.

In essence, Brazil needs to move beyond good intentions and start to
implement practical measures. To be fair, the nation has started to
reduce deforestation in the Amazon and limit damaging land-use change
through sustainable management. However, as discussed by Silva, what
has so far been announced in relation to other sectors such as
industry look less promising.

Apart from obvious greenhouse-gas sources such as heavy industry,
considerable amounts of carbon dioxide and methane are released from
tropical dams. Much of the electricity consumed in Brazil comes from
hydroelectric power plants. And yet, as discussed by Philip Fearnside
and Salvador Pueyo (page 382), emissions from tropical dams rarely
feature prominently in national or global greenhouse-gas inventories.

Even when greenhouse-gas emissions from tropical dams are considered,
they are often underestimated or misreported. There is no excuse for
this � reliable methods exist for measuring emissions from
reservoirs, as well as from turbine outlets and downstream river
flows, and for up-scaling estimates. It does not help when, as
documented by Fearnside and Pueyo, a major Brazilian electric
utilities company gets its sums wrong, thereby seriously
underestimating total reservoir surface emissions from Brazil's
largest dams. But even setting aside such sloppiness -- and indeed the
loss of river and forest habitat caused by dam construction --
tropical hydroelectric plants are not quite as green as often
portrayed, and certainly no panacea for dealing with the problem of
emissions from the energy sector.

This leads on to a more general point. It is often naively assumed
that energy from fossil fuels can be replaced in a one-to-one manner
with energy from renewable sources -- that is that one unit of
renewable energy displacing one unit of fossil-fuel energy. Indeed,
this is an implicit assumption of reports prepared by the
Intergovernmental Panel on Climate Change. However, as reported by
Richard York (page 441), the assumed relationship has not held for
most nations of the world over the past 50 years.

York finds that, on average, less than one-quarter of a unit of fossil-
fuel energy use is displaced by each unit of total national energy use
from non-fossil-fuel sources. Focusing solely on electricity, the
situation is considerably worse. As Andrew Jorgenson puts it in an
accompanying News & Views (page 398), "York's findings contradict the
widely held assumption that the expansion of alternative energy
production will proportionally suppress fossil-fuel energy
production." Jorgenson goes on to outline both the implications and
limitations of the study, but echoes the call of many that the best
way of reducing emissions is for all of us, individually and
collectively as societies, to consume less energy.

As already mentioned, one of the areas highlighted for attention by Rio
+20 is disaster readiness. On page 462, Ning Lin and colleagues
consider the likelihood of increased hurricane threat under climate
change, taking as a case example New York City, which is increasingly
vulnerable to flooding under storm-surge conditions. Using computer
simulations, the researchers show how the combined effects of changes
in storm climatology and sea-level rise could greatly increase the
frequency of surge flooding over the next century. Their findings
suggest that now is the time to initiate long-term adaption planning
so as to avert the worst impacts on property, infrastructure and the
safety of the city's citizens-- a theme expanded on by Jeroen Aerts
and Wouter Botzen on page 377.

Meanwhile, as discussed by Allan Findlay on page 401, a recently
published study (C. L. Gray and V. Mueller Proc. Natl Acad. Sci. USA
109, 6000-6005; 2012) has shown that climate change-related flooding
in a rather different context-- that of rural Bangladesh-- may be
relatively unimportant compared with non-climate-related crop failure
in driving human migration. So, could it be that warnings from
environmentalists that climate change will inevitably lead to forced
mass human migrations are mere scaremongering?

That is probably going too far, but as Findlay notes, even if
migration is a practical option, the decision to 'up sticks' and move
is likely to involve multiple, complex and intertwined factors. This
view is given further credence, by a study conducted by Dominic
Kniveton and colleagues in the landlocked west-African country Burkina
Faso (page 444). They find that owing to complex interactions between
climate, rainfall variability and various socio-economic factors,
migration could increase or decrease over the next few decades,
depending on the scenario considered � issues further discussed in
an accompanying News & Views by Etienne Piguet (page 400).

Moving to agriculture, there is now a not-so-small industry of
researchers looking to predict the possible impacts of climate change
on regional, national and global scales. Much of this work is intended
to inform policy. However, a dispute about projected future wheat
yield trends in the United Kingdom (pages 378 and 380) highlights, at
the very least, the critical importance of clarity in communicating
climate change evidence. We trust that whatever comes out of Rio+20
will be reported in a clear and unambiguous manner, reducing the
potential for unnecessary misunderstanding and rancour.

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China's Hydropower Miscalculation

China's Hydropower Miscalculation
Publication: China Brief Volume: 12 Issue: 11
May 25, 2012
By Sabine Johnson-Reiser


China's Jinsha River, literally the "Golden Sands" River, could soon
live up to its rich name. The approximately 2300-km long upstream
section of the Yangtze River is the site of up to 25, planned
large-scale (50 MW and above) hydropower projects (Caixun, May 4;
Dongfang Zaobao, May 3). China's state-run hydropower companies, local
governments, and energy-hungry cities in the more developed, eastern
provinces stand to profit from hydropower construction and electricity
generation. Driven by Beijing's energy and climate goals, this new dam
building rush, however, will reduce China's climate change adaptation
capacity and hurt relationships with neighboring countries without
providing the emission-free electricity Beijing is seeking.

China's status as the world's largest CO2 emitter has put increasing
pressure�both domestic and international�on Beijing to curb national
emissions (Climate Progress, December 7, 2011). In response, the
government has laid out a set of binding targets in the 12th Five Year
Plan: an 11.4 percent increase in the use of non-fossil fuel in primary
energy consumption; a 16 percent decrease in energy consumption per unit
of GDP; and a 17 percent decrease in CO2 emissions per unit of GDP by
2015 [1]. Now, China is looking for sources of clean, emission-free and
sustainable electricity to fulfill ever-growing demand and meet
renewable energy and emission targets. More large scale hydropower is
wrongly thought to be one such source. Consequently, dozens of projects
are planned or already under construction on a number of rivers,
including 26 on the Lancang, headwater of the Mekong, 13 on the Nu,
headwater of the Salween, and 28 on the Yarlung Tsangpo, the headwater
of the Brahmaputra (Atlantic Sentinel, March 10; The Hindu, June 10, 2011).

The Misguided Hydropower Narrative

Addressing China's power sector�a major contributor to national
greenhouse gas emissions�is critical to reaching Beijing's emission
targets. A terawatt hour (TWh) of electricity generated in China
produces on average 70 percent more CO2 emissions than a TWh generated
in the United States, and China's power sector accounted for almost 50
percent of the country's CO2 emissions in 2009 (International Energy
Agency, World Energy Outlook 2011). Developments in the power sector
therefore will have a significant impact on the country's emission

The high carbon-intensity of China's electricity is due to the sector's
heavy reliance on coal. Coal, a very carbon-intensive fuel, is used to
generate around 80 percent of China's electricity (China Statistical
Yearbook 2011). Hydropower accounts for 16 percent of the country's
electricity generation with nuclear, wind and solar making up the
remainder. Hydropower advocates argue that shifting the energy mix from
carbon-intensive coal to more hydropower would benefit China's emission

This argument relies on the still widespread "clean, sustainable and
emission-free hydropower" narrative. Even the United Nations Framework
Convention on Climate Change tacitly supports this misconception by
making reports of greenhouse gas emissions from dam reservoirs voluntary
(International Rivers, December 2, 2011). Studies however have shown
that hydropower can be a major source of greenhouse gas. Organic
material from previously forested, but now flooded land and washed up
debris, accumulates and decomposes in the dam reservoirs, thereby
releasing large amounts of methane, a potent greenhouse gas. This
problem particularly affects hydropower projects in tropical areas,
where the vegetation is generally denser and more organic material is
accumulated in reservoirs. Some hydropower facilities in tropical areas
emit up to twice as much carbon dioxide per unit of electricity as coal
fired power plants [2]. As most of China's planned hydropower projects
are located in densely forested, subtropical southern and southwestern
provinces, new dam reservoirs are likely to become significant emission

Making Adaptation Harder

The 12th Five Year Plan also addresses climate change adaptation
strategies. Beijing wants to strengthen the country's "capacity to cope
with extreme climate incidents," thereby enhancing China's climate
change adaptation capacity [3]. Yet, the construction of more dams will
decrease China's capacity to cope with extreme climate incidents, which
are predicted to include more frequent and more severe record floods and
droughts [4].

First, the impacts of large-scale dams on wetlands and human settlement
patterns limit China's adaptation capacity�the ability to moderate
potential damages or cope with the consequences of climate change�as
they expose millions of people to climate change related risks. To
maximize power production, dams store water during the wet season and
release it during the dry season. This alteration of natural river flow
patterns impacts the health of natural flood storage systems, such as
downstream wetlands, lakes and marshes, often leading to their
disappearance. Thus, dams reduce the frequency of smaller floods, but
also decrease or eliminate wetlands' natural capacity to absorb water
and thus mitigate severe floods.

In addition, dams enable the conversion of wetlands to agricultural
farmland and provide downstream cities with electricity and water for
irrigation, industrial and household purposes, enabling and encouraging
their development and growth. Hydropower development therefore
contributes to population growth in downstream areas, which
simultaneously increases the number of people at risk of dam failure as
changing precipitation patterns could lead to floods that may exceed the
storage capacity of dams upstream.

The controversial Three Gorges Dam is a case in point. With a capacity
of 22.5 GW, the dam can generate up to 84.7 billion kWh of electricity
for cities in central, southern and eastern China, including the
downstream metropolis of Shanghai (Xinhua, October 26, 2010). While its
reservoir supplied the population in the middle and lower Yangtze with a
steady source of water, it also contributed to the drying up of Dongting
and Poyang Lake, two of China's largest freshwater lakes, during the
2011 drought (Shanghai Daily, June, 2, 2011; China Three Gorges
Corporation, August 7, 2009). Although the dam withstood its first major
flood test in 2010, whether the Three Gorges Dam will be able to contain
future, possibly worse, floods is uncertain (Xinhua, July 20, 2010). If
it fails, downstream residents will not be able to rely on natural
floodplains to mitigate the impact with possibly disastrous consequences
for life and property.

Second, the operation of large-scale dams exacerbates droughts in
downstream areas. In theory, reservoirs could provide short-term drought
relief, by releasing stored water for use downstream. Yet, below a
certain water level, the primary objective of hydropower
operators�maximizing electricity generation�suffers. The fact that the
central government had to order the China Three Gorges Corporation to
release water from the reservoir to alleviate the severe drought
downstream in 2011 suggests that hydropower operators are likely to put
power generation ahead of drought relief (South China Morning Post, May
25, 2011).

Third, dams make it harder for coastal cities to adapt to rising sea
levels. As freshwater is held back in reservoirs upstream, natural water
outflows at river deltas are reduced, contributing to a fall in coastal
groundwater tables. Combined with rising sea levels, this makes coastal
delta regions more susceptible to saltwater intrusion, which
contaminates coastal freshwater aquifers and makes water unfit for human
consumption [5]. More dams could exacerbate future saltwater intrusion
challenges for many coastal Chinese cities brought on by rising sea
levels. Shanghai, located in the Yangtze River Delta, is already
experiencing saltwater intrusion, which research has linked to
variations in water discharge from the Three Gorges Dam (Scientific
American, October 13, 2009) [6].

Lastly, the expensive and long-lasting nature of hydropower
infrastructure makes it difficult or impossible to adapt them to future
changes in the environment, agricultural and economic activities and
human settlement patterns.

Large-scale dam construction is very costly. The record-setting Three
Gorges Dam cost approximately $25 billion. Even smaller projects like
the planned Xiaonanhai Dam on the Upper Yangtze cost up to $5.6 billion
(China Dialogue, March 9, 2011). China Post Securities analyst Shao
Minghui estimates the hydropower sector will need around $136 billion in
infrastructure investment by 2020 (Shanghai Daily, January 6, 2011). The
sheer size of this kind of investments often prompts path dependency�the
preference to continue even if better alternatives are available�as
investors look to realize promised returns on investment, and local
governments are unwilling to admit that there may have been better
development alternatives.

Furthermore, the design of hydropower dams is based on historical and
current river flows. While their lifespan ranges from 50 to 100 years,
climate change is likely to alter future river flows within decades.
Modifications to existing large-scale dams to accommodate these changes,
however, are either technically infeasible or very expensive. Dried up
rivers or changing river courses could turn dams into stranded assets,
because they, unlike solar or wind installations, cannot be moved. A
drought in 2011 caused a 28 percent reduction in hydropower output,
resulting in 1000 factories and companies in Guizhou suspending
operations and showing even temporary reductions in water flows can
result in significant power shortages (Xinhua, August 24, 2011).

Damming International Relationships

China's dam building rush will have negative impacts on relationships
with neighboring countries. Furthermore, national hydropower companies'
overseas venture may harm China's international reputation.

China's territory encompasses parts of 18 of Asia's major international
river basins. Moreover, China's position along these river basins is
predominantly upstream, and, in the case of the Brahmaputra, the Mekong,
and the Salween, at the source. Hydropower development in China
therefore has international impact, and affects China's relationships
with its downstream riparian neighbors, including Bangladesh, Cambodia,
India, Laos, Myanmar, Thailand and Vietnam. The construction of cascades
of large-scale hydropower dams along rivers in China's territory affects
the water quantity and quality downstream. While the exact extent of
these dams' negative impact on water availability, fish populations and
consequently downstream populations may be unknown, the existence of
such effects is certain.

Upstream dams also provide some control over the timing and amount of
water flow in the rivers affected. People downstream therefore may feel
that Beijing rather than nature controls their water and their welfare.
Admittedly, upstream China does not control the entire water flow of
these rivers as water volumes generally increase along the river. Yet,
as river basins are highly complex, and the precise amounts of water
inflows at particular sections are hard to measure, citizens of
countries downstream may perceive China to be in full control. Indian
newspapers, for example, write of China's "superior upper riparian
positions" and "unique position of controlling international rivers,"
and suspect the country of secretly diverting water from the
Yarlung-TsangpoRiver (Hindustan Times, March 2; India Today, August 19,
2011). In 2010, when severe drought hit the Mekong, farmers and
fishermen in countries downstream blamed China and its hydropower
stations for the disaster, despite China's assurance that it collected
only "four percent of the river's water" (China Daily, April 9, 2010;
New York Times, April 1, 2010). Regardless of the validity of these
suspicions, given China's geographic position, more hydropower
construction will further strain relationships with already apprehensive
neighbors and nations downstream.

Furthermore, for about a decade now, Chinese state-run hydropower
companies have increasingly looked abroad to market the experience and
technology gained in domestic projects. More domestic dam building is
likely to make these companies even more internationally competitive as
they gain further technical expertise and financial resources. Yet, the
nature of many of these overseas ventures may harm China's international

As Europe and North America have turned away from the construction of
large dams, Chinese companies armed with newfound skills have sought
projects in other Asian, African and South American nations�many of
which lack strong legal and political institutions, environmental and
regulatory oversight and suffer from corruption and instability. Chinese
banks and companies currently are involved in about 300 projects in 66
countries, including Angola, Burma, Cambodia, Ethiopia, Iran, Sierra
Leone and Sudan (International Rivers, May 1). Due to these problems,
many of the projects are high risk, involve human rights violations by
local governments and fail to be built according to international
environmental and safety standards. In the long run, this reflects
negatively upon Chinese companies and ultimately the country as a whole.

The Myitsone Dam on the Irrawaddy in Burma illustrates this point.
Located in Kachin State, home to a strong separatist movement and site
of frequent, armed clashes between the Burmese military and the Kachin
Independence Army, the project was supposed to be financed and built by
the China Power Investment Corporation, before President Thein Sein
suspended it in 2011 (The Irrawaddy, September 21, 2011).Myitsone holds
a special cultural and religious significance for the Kachin, who revere
the area as the birthplace of their culture. Should construction move
forward, the result is likely to be viewed as a symbol of China's lack
of cultural sensibilities and disregard for local minority groups (China
Dialogue, March 28, 2011).

Conclusion and Recommendations

Beijing's focus on hydropower to achieve energy and emission targets
largely ignores or downplays large-scale dams' negative impacts on the
climate, the country's adaptation ability and relations with neighbors
as well as China's international reputation. Yet, there are a range of
alternatives to large dams.

Greater focus on energy efficiency could provide huge energy savings.
For example, China's cement industry alone could achieve primary energy
savings of 23 percent through the implementation of international best
practices [7]. In the power sector, the government could accelerate its
efforts to replace small, inefficient power plants, with more efficient
supercritical and ultra-supercritical power plants, as well as combined
heat and electricity cogeneration plants. More efficient appliances and
lighting could reduce household electricity consumption, a growing part
of China's total consumption. This could be achieved through programs
similar to Energy Star in the United States.

Additionally, all existing alternative energy infrastructure should be
connected to the power grid. As of 2011, 30 percent of China's wind
power capacity, for example, was not yet connected to the grid (Xinhua,
February 24). At the end of 2008, small hydropower plants numbered
50,000, many of which were built decades ago and are equipped with
outdated, inefficient technology (China Daily, January 7, 2009). Prior
to building new projects, existing infrastructure should be surveyed,
and where necessary retrofitted with new technology to be more productive.

While less impressive in scale than highly visible mega-dams, these
alternatives could alleviate expected energy shortages, and help Beijing
achieve its targets without the negative consequences and future risks
associated with large scale dams.


1. Twelfth Five Year Plan, available in Chinese and English,
respectively, news.xinhuanet.com/politics/2010-10/27/c_12708501.htm and

2. William Steinhurst, Patrick Knight, and Melissa Schultz, Hydropower
Greenhouse Gas Emissions, Cambridge, MA: Synapse Energy Economics,
February 14, 2012.

3. Ibid.

4. China's Policies and Actions for Addressing Climate Change,
Information Office of the State Council of the People's Republic of
China, October 2008, www.gov.cn/english/2008-10/29/content_1134544.htm

5. Lester Brown, Eco-Economy: Building and Economy for the Earth, New
York : W.W. Norton, 2001, especially Chapter 2.

6. Qiang An, Yanqing Wu, Shauna Taylor and Bin Zhao, "Influence of the
Three Gorges Dam on Saltwater Intrusion in the Yangtze Estuary,"
Environmental Geology, No. 56, 2009, pp. 1679�1686.

7. Lynn Price, Ali Hasanbeigi, Hongyou Lu, and Wang Lan, Analysis of
Energy-Efficiency Opportunities for the Cement Industry in Shandong
Province, China, Lawrence Berkeley National Laboratory, October 2009

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Iran Cancels $2 billion Dam Deal With China

Iran Cancels $2B Dam Deal With China
30 May 2012 - Dow Jones Chinese Financial Wire

LONDON (Dow Jones)--Tehran has cancelled a $2 billion contract with
China to build a giant hydro-electric dam, an Iranian official said
Tuesday, a setback for Iran's strategy to deepen ties with the Asian
nation amid mounting sanctions.

The official was confirming Iranian media reports that said Iran's
central bank had rejected the financial terms offered by China's
Sinohydro Corp, which couldn't be reached for comment.

Instead, Iran gave the contract to Khatam al-Anbiya, which is controlled
by the Iranian Revolutionary Guard Corps, Energy Minister Majid Namjou
was quoted as saying by the semi-official news agency.

The project is for a 1,500-megawatt electricity plant and dam called
Bakhtiari in southwestern Iran, which Iran has described is the largest
of its kind in the country.

Iran has bet on China to break its increasing isolation in the wake of
deadlocked nuclear talks with the West. The move includes bartering
Iranian oil--for which Beijing has become the largest buyer--for
infrastructure projects using China's currency, the Yuan. However, Iran
has signaled it wouldn't offer discounts on the value of its oil and has
also frequently complained that Chinese investors weren't moving fast

Reporting on the cancellation of the dam contract, Iranian reformist
newspaper Etemaad blamed "obstructionism and delays" by Chinese
companies and said it had turned them into "most unreliable foreign
contractors in Iran."

In October, Iran had already suspended a $15 billion deal with the China
National Petroleum Corp. to develop the major North Pars gas field in
the Gulf, following years of delays.

Western experts in Tehran estimate Chinese companies have so far
injected less than 10% of the $50 billion they have promised over the
past five years to invest in various Iranian projects, most of them in
the oil and gas sector.

However, the vacuum left by foreign companies has been filled by the
regime's tight-knit inner circle.

Parviz Fattah, director general of IRGC Cooperatives Foundation which
oversees some of the Guards' businesses, officially asked President
Mahmoud Ahmadinejad to transfer the dam contract to Khatam al-Anbiya,
according to daily Etemaad.

The Guards' Khatam al-Anbiya has been awarded contracts worth more than
$25 billion in Iran's oil and gas sector, according to a figure given
last year by deputy oil minister Ahmad Qalebani.


Iranian press highlights 29 May 12
29 May 2012
BBC Monitoring Middle East

The following is a selection of highlights from the Iranian national
press on 29 May


1. Unattributed report: "With the transfer of the greatest Iranian dam
to Khatam ol-Anbiya [IRGC Construction Base]: The exit of the
almond-eyes from Iran." The daily reports that Parviz Fattah, director
general of IRGC Cooperatives Foundation, and former energy minister, has
officially asked President Ahmadinezhad to transfer the Bakhtiari Dam
contract - the greatest of its kind - to IRGC's Khatam ol-Anbiya
Construction Base. The daily says that such transfers "have become
routine these days," and that they come as consequence of the Chinese'
"obstructionism and delays" that had turned them to "most unreliable
foreign contractors in Iran." The report lists and explains the state of
progress of various Iranian projects, in which the Chinese are or have
been involved. These include North Pars Gas Field, Phase 11 of South
Pars Gas Field, Yadavaran and Azadegan oil fields, Iran LNG, Kermanshah
Anahita Refinery, Esfahan Refinery, Resalat Oil Field, Garmsar Oil and
Gas Exploration Bloc, Setareh-ye Khalij-e Fars (Persian Gulf Star) Oil
Refinery. (p 1; 2,763 words)

Sources: Iranian press highlights, in Persian, 29 May 12

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WBank set to infuse Inga dam with money

Three articles on plans to dam the Congo River.
Africa Energy Intelligence, N� 676


Big cash input for Inga
The World Bank is putting together a $43 million technical assistance
package for Congo-K�s energy ministry that will be put to the
institution�s board in a year�s time. It will be rounded out by a
further $20 million loan from the African Development Bank. The money
will go towards forming a legal and institutional framework for the
huge Inga 3 dam project on the Congo River, a framework that will
enable the Bank to continue funding the project (it is scheduled to
offer financial guarantees for Inga 3, or may even acquire a direct
stake in it). To be sure, Inga 3 will be promoted as a public/private
partnership: the dam and adjacent canals will belong to the government
and be financed out of public funds, but the power plant is to be
private. To deal with such a complex set-up, the Bank wants Congo to
set up an �Inga 3 authority� to manage the site and act as interface
with the private operator.


DRC short-circuits power supply
12 May 2012 02:51 - Roman Grynberg

Southern African countries bear the brunt of ambitious plans gone
awry, writes Roman Grynberg.
For many years the Democratic Republic of Congo (DRC) has proposed the
development of new hydropower plants along the Congo River.

In the early post-independence phase, it developed the Inga I and II
dams, which supplied the country with what has become increasingly
intermittent hydroelectric power.

The government now wants to develop the Inga III dam on the river,
which will produce somewhere between 4000MW and 5000MW of electricity
a year.

But the intentions of the DRC go well beyond this. Over time, it wants
to develop the Grand Inga Dam project, which will provide 40000MW of
electricity at a staggering cost of $80-billion to $100-billion. The
dam will be twice as large as the Three Gorges Dam in China � the
world�s largest in terms of electricity production.

The World Bank estimates that the Congo River, if properly used, could
generate up to 100 000MW of electricity a year � enough to supply the
entire Africa for decades to come.

When South Africa began running out of electricity from its ageing
thermal plants at the beginning of this century, a new project,
Westcor, was established in 2003 to bring the DRC�s vast hydroelectric
resources to an increasingly energy-starved Southern Africa.

Memorandum of understanding
The project had the backing of the New Partnership for Africa�s
Development and the Southern African Development Community (SADC) and
would have directed electricity through a new western corridor to
Angola, Namibia, Botswana and South Africa.

The SADC members even signed an interutility memorandum of
understanding and an intergovernmental memorandum of understanding
with the DRC to develop the Inga III dam. Namibia, Botswana and Angola
were to share 1000MW of the project when it peaked in 2015.

With the DRC winding down from the largest war in Africa�s history,
there was no way it could develop such a project alone � and so its
neighbours agreed to buy the electricity and help to develop the dam.
Initially all seemed well, but cheap electric power results in a
fiendish �addiction� for big users and the worst �addict� is probably
the aluminium industry.

About 60% of the cost of aluminium is the electricity used to refine
it. As a result, mining companies are willing to ship their bauxite
to the most remote locations to take advantage of cheap power.

In Mozambique, BHP Billiton managed to use a large amount of that
nation�s cheap electricity from the Cahora Bassa Dam to power the
Mozal I and II project�s smelters. The Mozal plants produce 500000
tonnes of aluminium a year. By the mid-2000s the Mozambican government
made it clear that it had no interest in the further expansion of
Mozal III because there was not enough electricity available.

Embedded derivative
In the late 1990s, Mozambique � desperate for investment after its
economy had been virtually destroyed by decades of the liberation
struggle and civil war � had agreed to give the company a 50-year tax
holiday in terms of which it would only pay taxes on 1% of turnover.

The company could use what Eskom proudly advertised as the cheapest
electricity in the world through an opaque financial instrument called
an embedded derivative, which linked the price that BHP Billiton paid
to Eskom to the price of aluminium and the value of the United States

Eskom lost R9.5-billion in 2009 as aluminium prices and the value of
the dollar collapsed. But the power utility, unlike the government of
Mozambique, was able to renegotiate what had been a bad deal with BHP

However, BHP Billiton knew that Southern Africa was running out of
cheap electricity and, like all �addicts�, went elsewhere for a fix �
to the next nearest source of cheap power, the DRC, which, like
Mozambique a decade earlier, was war-ravaged and desperate for

BHP Billiton agreed to build a $2.5-billion smelter near Inga III and
to develop the dam, thereby undermining supply to the Westcor partners.

The DRC�s four neighbours, which by then had poured a great deal of
money into Westcor, were not amused. Pat Naidoo, then-chief executive
of Westcor, was quoted as saying in 2009: �The DRC government has said
to us that they would like to take on the development of the Inga III
on their own in order to cater for the supplies of, principally, BHP
Billiton�s energy demand for its proposed smelter. So they would
develop the power station themselves, which is very unlikely.�

In 2010 Westcor, after having swallowed millions of rand, vanished
into history. Naidoo was proved correct in his predictions because, in
March, BHP Billiton opted out of the Inga III project, saying the
economics were unfavourable.

Perhaps, after weighing the risk of investing in a country that was
ready to pull the plug on its neighbours, it realised that it was
unwilling to take the risk of having the DRC change its mind again.

Ironically, in the past few weeks DRC ambassadors and representatives
have been going around the region desperately looking for customers to
buy electricity from Inga III. It will have to find them before anyone
will consider funding the $5-billion to $8-billion project.

It is now proposing what is reported to be an �Eastcor� project, which
would include Zambia. In the meantime, Botswana appears to have
learned its lesson and has built a 600MW thermal power station at
Moropule and is planning a further 600MW later this decade to meet its
growing energy demands.

Grand Inga
This is fine for Botswana, which has vast coal reserves, but quite
another matter for countries such as Namibia, which is short of energy
and � presumably out of desperation � is reported to be considering
buying electricity from the DRC.

The DRC�s ambassador in Namibia, Kaboba Wa-Kimba, reportedly said:
�South Africa has already indicated that they want 1700MW from the DRC
and an agreement to this effect was signed in November 2011.� It has
also been reported that President Jacob Zuma and the DRC�s president,
Joseph Kabila, are expected to sign an agreement this year on
developing the $100-billion Grand Inga dam.

If this is the case, Zuma will need to explain where he sees Grand
Inga fitting into Eskom�s long-term power supply plans. The parastatal
has resisted attempts by Botswana over the past few years to sell
large volumes of coal-powered electricity from CIC Corp�s Mmambula
thermal coal mine. Hydropower is, of course, much cheaper than coal.

The World Bank, the African Development Bank and regional bodies are
now pushing regional power integration at the cost of prudence and
good sense.

In the wake of the Westcor fiasco, the DRC cannot be regarded as a
credible partner and it is imprudent to rely on it for electricity to
fuel development. But some countries have short memories and will not
wean themselves off offers of cheap power no matter what has been done
to them in the recent past.

Perhaps the only real lesson from this sad attempt at regional power
integration is �fool me once, shame on you; fool me twice, shame on me!�

These are the views of Professor Roman Grynberg and not necessarily
those of the Botswana Institute for Development Policy Analysis, where
he is employed

World Bank Accused of Ignoring Lessons on Mega Infrastructure
By Carey L. Biron

WASHINGTON, May 16, 2012 (IPS) - In a renewed funding focus on large-
scale infrastructure, the World Bank, Group of 20 (G20) countries and
other multilateral groups are wilfully overlooking lessons learned
decades ago, a new report by International Rivers warns.

In recent months, the report notes, infrastructure has again become a
"buzzword of the current development debate".

The issue also looks set to figure large in upcoming discussions in
Mexico among the G20 and in Rio de Janeiro for the United Nations
Conference on Sustainable Development, but could spark a rethink
following new World Bank President Jim Yong Kim's assumption of
leadership in June.

"Past energy, water and transport strategies have neglected the
poorest population groups, and taken a heavy toll on affected people
and the environment," states the report, noting that new strategies
that don't specifically address the needs of the poor risk
"entrench(ing) the power of privileged groups".

Infrastructure has always been a key development concern. But while
large-scale projects for decades constituted a funding priority for
the World Bank, such lending took a backseat during the 1990s.

This policy move coincided with increasingly vocal criticism of the
social, environmental and financial costs at stake with such mega
projects. Such mobilising seemed to have an effect, as through the
1990s the World Bank scaled back its development of massive

Now, that appears to have come to an end. "Infrastructure lending has
once again become the World Bank's core business," notes the report,
titled "Infrastructure for Whom?"

Apparently motivated by the G20, in late 2011 a series of new policy
papers charted a wholesale return to large-scale infrastructure as a
development strategy by the multilaterals.

Large, privately funded, centraliSed projects, the argument suggests,
will result in lower overall costs of primary services, such as
electricity. But the evidence does not bear out the contention that
investment in large projects has a resulting impact on the poor.

While the recent World Bank policy paper highlights the Inga dam in
the Democratic Republic of Congo � the largest hydroelectric
installation in the world � as exemplary of its newfound focus, the
International Rivers researchers point out that billions of dollars in
investment in the site over the past 50 years has left 94 percent of
the country without access to electricity.

In the past, the Bank itself has admitted to overdependence on the
idea that such mega investment would "trickle down" to local
communities. But little in the new documents suggests that this lesson
has informed current policymaking.

"Many communities want investments in infrastructure and other
development, but top-down approaches are no longer being tolerated,"
Andy White, a coordinator with the Rights and Resources Initiative
here in Washington, told IPS. "Unfortunately, many projects already
underway are being planned without due consideration of local peoples'
rights or the environmental consequences."

Observers are likewise dubious at the prospect of increased dependency
on private investment. While the Bank has set a goal of doubling
current levels of public-private partnerships (PPPs), it admits that
doing so is based on its own budgetary problems, as is the larger push
towards consolidation into larger projects.

Yet private investment has traditionally tended to centre almost
exclusively on urban and middle-class segments of a population, often
further marginalising the impoverished communities in whose name
development projects are typically undertaken.

"While we recognise the need for better infrastructure and private-
sector investment in developing countries, market forces alone will
not automatically make basic services affordable to those that need
them the most," Asif Saleh, with BRAC, a global development
organisation based in Dhaka, told IPS.

"Market-based solutions will require some level of protection for the
poor � at least for a certain period, until economic growth in the
given region becomes more inclusive. If we want to ensure that
inclusivity, it's important also to focus on creating opportunity from
the bottom up."

Conflicts of interest

PPPs might well be increasingly important development tools in the
current context of economic downturn and austerity. Andy White notes
that "done correctly, this influx of investment provides an
opportunity to clarify land rights and advance equitable development
across developing countries' landscapes."

Yet many warn that such an approach would need to include a
simultaneous priority on accountability. Large-scale projects, after
all, are notoriously problematic in allowing for public oversight.

"In constructing PPPs, there are inherent conflicts of interest,"
Michelle Chan, with Friends of the Earth U.S., told IPS. "Once you mix
in a significant participation from the private sector, there is going
to be a bias against the levels of transparency that you would expect
from a publicly funded project."

Chan says that while infrastructure is clearly critical for
development, it is disheartening to see that the World Bank "continues
to be biased towards new mega projects that often benefit industry
over people".

She points to a new 600-megawatt power plant in Kosovo that would burn
lignite, the dirtiest form of coal. Despite clear environmental
concerns, the Bank is currently considering funding the project.

"For the Bank, it is easier to fund a massive, polluting plant like
this, rather than deal with the fact that Kosovo loses half of its
energy due to simple inefficiencies," Chan says. "The World Bank needs
to get better at distributed energy, rather than continuing on this
path of centralised infrastructure."

International Rivers likewise points to a finding by the International
Energy Agency that 70 percent of rural areas would be best served by
electrification through distributed solutions.

"Such bottom-up solutions", the report concludes, "offer a better way
to address the basic needs of the rural poor than the large regional
projects proposed by the G20 and the development banks."

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And Let the fish be Dammed [IPS, 29.05.12]

And Let the Fish be Dammed    PHNOM PENH, May 29, 2012 (IPS) - Khom Kieu and her family have run a  bustling fish market on the outskirts of Phnom Penh for as long as she  can remember. But these days, ensuring a steady supply of Cambodia=EF=BF=BD=  s  main source of protein is harder than ever.    "There seem to be less and less fish every year," Kieu says. "I have  no idea why."    When Cambodian fishermen can=EF=BF=BDt supply enough food for her customers=  ,  Kieu says she has to import frozen fish caught in neighbouring Vietnam  and hauled up the Mekong.    The bountiful rivers throughout this South-east Asian country have  allowed Cambodians to be self-reliant for generations. But concerned  environmentalists envision a future where this vital food supply will  no longer provide enough protein to feed the country on its own.    The Mekong system is the most productive freshwater fishery in the  world. It represents a key source of animal protein for the countries  along the Lower Mekong - Thailand, Laos, Cambodia and Vietnam.    No country is more dependent on this than Cambodia, where most of the  nation=EF=BF=BDs protein intake comes from its inland fisheries.    Environmentalists are warning, however, that a series of hydropower  dams proposed for the Lower Mekong=EF=BF=BDs mainstream river pose a grave  threat to the region=EF=BF=BDs food supply. The message, they say, is  particularly resonant ahead of June=EF=BF=BDs United Nations Conference on  Sustainable Development, known as Rio+20.    "One of the most significant threats to the sustainable development of  the region is the Mekong mainstream dams," says Ame Trandem, the South-  east Asia programme director for the advocacy group International  Rivers. "It would be irresponsible of the region=EF=BF=BDs governments to  allow the Mekong River to be dammed."    China has already moved on developing a cascade of dams on the Upper  Mekong. The mainstream of the Lower Mekong, running south via Burma,  Thailand, Laos, Cambodia and Vietnam, remains undeveloped for the time  being.    But the Lower Mekong nations have proposed 11 hydropower projects.    The first, Laos=EF=BF=BDs Xayaburi proposal in the northern part of the  countr, has proven to be a divisive issue among its neighbours.    Critics say even one dam built on the Lower Mekong could irreparably  harm the region=EF=BF=BDs food supply. The dams could block the passage of  migratory fish - there are more than 100 known species that must  travel long distances to spawn - and environmentalists say mitigation  measures proposed for the dam are unproven and probably ineffective.    Studies show dams could also block significant amounts of sediment  from flowing downstream to agricultural lands reliant on the vital  nutrients.    Cambodia in particular stands to lose more than 300,000 tonnes of fish  production each year should all the proposed dams be built, according  to a 2010 report commissioned by the Mekong River Commission, the  multilateral agency the four Lower Mekong countries set up to guide  development on the river. The figure is greater than the country=EF=BF=BDs  entire current livestock production.    Researchers say Mekong countries would be hard pressed to replace this  key food source with alternative production in resource-intensive  livestock.    In a study released at a May conference on trans-boundary water  management ahead of Rio+20, researcher Jamie Pittock suggests that the  four Lower Mekong countries would need anywhere between 5,700 and  28,300 square kilometres of new pasture land to replace the lost  protein, depending on how many of the dams - both mainstream and  planned tributary projects - are actually built.    Cambodia would face the most problems in having to more than double  its current pastureland, under a worst-case scenario, just to make up  for the lost food source.    This will likely see Mekong countries become more dependent on  importing food to meet their needs.    "Replenishing lost food security for the millions of people impacted  is likely to be extremely costly and has yet to be adequately  considered," said International River=EF=BF=BDs Ame Trandem.    Mekong governments say hydropower in general is needed to fuel  development throughout the region. Thailand would be the main  recipient of power from the planned Xayaburi dam. However, civil  society groups say Thai authorities have over-forecast their energy  needs.    Thai energy analyst Chuenchom Sangarasri Greacen says it is profits,  not accurate demand forecasting, that is driving current projections.  The U.S.-based researcher says Thailand=EF=BF=BDs current energy plan has  overestimated the country=EF=BF=BDs needs by 13,200 megawatts, more than te=  n  times the capacity of the proposed Xayaburi project.    "We don't even need the power from Xayaburi," Greacen says. "If the  project is at least justified economically or from an energy  perspective, then there's some debate as to whether or not it's a  worthwhile tradeoff. Even if we were to need the energy I don't think  that the tradeoff is worth it. But what's really sad is that it's not  even a tradeoff. It's not even needed."    For now, plans to dam the Lower Mekong=EF=BF=BDs mainstream are in a holdin=  g  pattern as the four affected countries have reached an impasse on how  to proceed. Cambodia and Vietnam have asked for further study before  any construction is to begin. Any final decision to build, however,  still rests with each country.    Laos has publicly promised to hold off until more research is  complete. But critics point out that Laos has already begun  constructing infrastructure around the dam area. And the Thai firm  tasked with building the Xayaburi project, CH Karnchang, in April  announced that it had finalised a deal to build the dam.    http://ipsnews.net/news.asp?idnews=3D=  107947    

Friday, May 25, 2012

China speeds up approval for large hydropower projects

China speeds up approval for large hydropower projects
Xinhua News Agency
May 24, 2012


BEIJING, May 24 - Datang's 3-milllion-kilowatt Guanyinyan hydropower
project in southwest China's Yunnan province was nodded by the National
Development and Reform Commission (NDRC), indicating a speeding approval
for large hydropower projects in China this year.

Under the great pressure of downward economy, a bunch of hydropower
projects are expected to be approved in the second half of 2012, said

Apart from Datang's project, the NDRC has also approved the 772MW Angu
hydropower plant, 720MW Zhentouba primary hydropower plant, and
Shangping secondary hydropower plant since March 2012.

The speeding development of hydropower industry is also mirrored by
increasing investment. According to statistics by the National Energy
Administration, China's investment in power generating rose 18.3 percent
on year to 72.4 billion yuan in the first quarter of 2012, including
27.6 billion yuan in hydropower, up 78.06 percent on year.

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China approves $448 million loan for Neelum-Jhelum project

China approves $448 million loan for Neelum-Jhelum project
By Khalid Mustafa
The News
Wednesday, May 23, 2012


ISLAMABAD: China's EXIM bank has approved the much-awaited loan of $448
million for the strategic 969 megawatt Neelum-Jhelum hydropower project
following which the construction work on the project is likely to get
accelerated, officials said.

They said it would provide solace to the Neelum-Jhelum hydropower
project company as the project that was earlier feared to get delayed on
account of cash flow constraints. Current slowdown in the pace of
construction provided an edge to India, which is building Kishanganga
project on the same Neelum River on its side of the Kashmir.

According to the Indus Water Treaty, the country that first completes
its project on Neelum tributary will have priority rights on the water
of Neelum River. Now with the approval of $448 million loan for the
project, China has bailed out Pakistan and concerns over the slowdown in
pace of completing the project have evaporated.

Officials said now the project will be completed on time in 2016 as $93
million high-tech tunnel boring machines have arrived on the site of the
project which would help expedite the project may be even before the
time schedule.

Dr Waqar Masood, secretary of the Economic Affairs Division, when
contacted confirmed that China's EXIM bank has approved the loan of $448
million for the project. "The loan is a commercial buyer credit in nature."

"Now the government is in process of completing the required
documentation to submit with the Chinese bank," he said, adding that the
loan will be disbursed in a span of more than one month.

"China has emerged as the largest development partner and creditor of
Pakistan in the last three years and its loan portfolio has increased to
whopping $3.3 billion."

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Goldman sets $40 billion clean energy investment plan

Goldman sets $40 billion clean energy investment plan

Wed, May 23 2012
By Lauren Tara LaCapra


(Reuters) - Goldman Sachs Group Inc plans to channel investments
totaling $40 billion over the next decade into renewable energy
projects, an area the investment bank called one of the biggest profit
opportunities since its economists got excited about emerging markets in

Goldman executives said this week that demand for alternative energy
sources will grow with global energy demand, and as big manufacturing
countries, including China and Brazil, set more aggressive targets for
reducing emissions. The bank plans to finance deals with clients' money
and, to a lesser extent, its own funds.

Goldman, which plans to announce the new target at its annual meeting on
Thursday, already invests in clean technology. In 2011, it helped
finance $4.8 billion in clean technology companies globally, and
co-invested more than $500 million in that area. The new target would
average out to $4 billion a year, leading some analysts to minimize the
target as more of a "charm offensive" than a new initiative.

In 2005, Goldman pledged to invest and finance $1 billion of
environmentally friendly projects. By the end of 2011, the company had
exceeded its goal, arranging $24 billion worth of financing and
investing $4 billion into such projects, said Kyung-Ah Park, head of
environmental markets at Goldman.

The bank's new $40 billion target applies to investments and financings
for solar, wind, hydro, biofuels, biomass conversion, energy efficiency,
energy storage, green transportation, efficient materials, LED lighting
and transmission.
Goldman has also pledged to reduce its own net carbon emissions to zero
by 2020.

Stuart Bernstein, head of Goldman's clean technology and renewables
investment banking group, compared the opportunity to technology
investments in the 1990s or investing 10 years ago in fast-growing
countries like Brazil, Russia, India and China, for which Goldman
economist Jim O'Neill coined the term "BRIC" in 2001.

"This is another emerging opportunity we think will be quite large,"
Bernstein said.
Enthusiasm for renewables was high in 2006 and 2007 as oil prices
soared. But enthusiasm waned after the financial crisis cut energy
demand and cash-strapped governments reduced subsidies for alternative
energy programs.

The use of hydraulic fracturing technology to access abundant supplies
of natural gas in the United States and elsewhere has also undermined
alternative sources of energy.

"Obviously we recognize this is not the easiest of times in the clean
energy market but nevertheless the underlying thesis as to why cleaner
and more sustainable forms of energy need to scale up still holds true,"
Park said.

Analysts and experts said Goldman may also be looking to score public
relations points for a relatively small investment.

The bank has been on a charm offensive in recent months, after a former
employee wrote a scathing opinion piece in the New York Times in March
accusing Goldman of ripping off clients regularly. That was the latest
in a series of blows the bank's image has suffered since the financial

"It's forcing a firm that had its roots in being private for a very long
time to have to go out there and defend itself," said Michael Carrazza,
a former Goldman banker who is now CEO of the private equity firm Solaia
Capital Advisors. Promoting these sorts of initiatives makes sense, to
show that the bank does some good, Carrazza added.

(Reporting By Lauren Tara LaCapra)

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Ripples that may last - Community led solutions could be one of the many ways to stem the current water crisis

Ripples that may last
The Hindu, May 25, 2012
Bharat Dogra

[Note: The SANDRP report which is reviewed in the following article is
available at

Community led solutions could be one of the many ways to stem the
current water crisis

John F. Kennedy once said, "Anyone who can solve the problem of water
will be worthy of two Nobel prizes – one for peace and one for science."
While they may not be aspiring for this prize, the country has several
activist-scholars whose combination of grassroots work with academic
research has increased their ability to offer cost-effective solutions
for water-related problems and crisis situations.

One such scholar-activist is Himanshu Thakkar, engineer and
environmentalist. He was earlier with the Narmada Bachao Andolan before
he initiated (with other colleagues) the South Asia Network on Dams,
Rivers and People (SANDRP). The network's voice is heard with increasing
respect on water-related issues as it takes a lot of care to suggest
only those solutions which minimise all costs (economic, social and
environmental), emphasise sustainability and promote community led

SANDRP's latest effort is a study titled 'Water Sector Options for India
in a Changing Climate' which includes case studies done by experienced
researchers. As any planning for water now will have to take into
account the new problems and stresses arising due to climate change, the
study is relevant today.

According to the study recent data reveals that the rainfall pattern in
India is changing significantly and a major reason for this changing
pattern is climate change. The frequency and magnitude of high rainfall
events is increasing while the number of rainy days is decreasing. This
raises the possibility of increased frequency and intensity of floods.
The onset of monsoon and the gap between rainfall events is becoming

These changes are likely to have a massive impact on all farmers,
particularly rain-fed farmers. Adaptation will be helped if we make
rainwater harvesting and groundwater change the top priority in our
water resources policy and programmes.

Groundwater is India's lifeline and to protect it a three-point strategy
is advocated. Firstly, ensure the sustenance of existing groundwater
recharge systems including local water systems and their catchments.
Secondly, give top priority to the creation of more such systems.
Thirdly, put in place a credible, legally enforceable, community led
regulation. At the same time, the government should promote greater
access of groundwater to the underprivileged, particularly the Dalit

The study also advocates organic farming as increased organic matter in
the soil will also increase water security for rain-fed farmers by
enhancing the moisture holding capacity of the soil. Water-saving,
high-yielding and low-input requiring practices like the System of Rice
Intensification (SRI) should be promoted. Water intensive crops and GM
crops should be discouraged.

A Right to Water Act should be enacted keeping in view ecological
protection, human rights protection and livelihood protection. The human
rights perspective is that clean water should be ensured for drinking
and domestic use as a right to all people without any discrimination. An
ecological perspective emphasises the protection of rivers, lakes, wet
lands and all water bodies. A livelihood perspective demands that water
should be available to support livelihoods. Existing water laws should
also be re-examined from these perspective, the study says.

There is a clear need to evaluate carefully the actual usefulness of
huge dams and canal networks that have been built as the available data
raises disturbing questions. Future emphasis should be on ensuring
better utilisation of existing infrastructure instead of rushing into
new gigantic projects of dubious merit and high costs. To ensure proper
functioning of reservoirs, each reservoir should have an operation
committee in which at least 50 per cent members should be from the local
communities. Freshwater flow all around the year should be ensured in
all rivers at levels which are adequate for social and ecological needs
including groundwater charge.

Overall, the merit of the study is that while highlighting the new
problems likely to be aggravated in the already stressful situation of
water crisis, it carefully avoids a panic response and lists a wide
range of highly desirable solutions which can help to solve the water
crisis without causing any social and ecological disruption.

The logo of SANDRP is a plant with three leaves which represent three
principles of sustainable water solutions - 'harvest rain', 'let rivers
flow' and 'no destructive projects'. The study seeks solutions based on
these three principles.

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Thursday, May 24, 2012

Sinohydro expects growth in orders, overseas revenue

Sinohydro expects growth in orders, overseas revenue
Dam builder plans to increase new orders by 21 per cent, and to boost
foreign income by 16 per cent
Toh Han Shih
South China Morning Post, May 23, 2012

Sinohydro, the world's biggest dam builder, plans to increase domestic
orders and overseas revenue to double digits this year, as the central
government plans to expand the mainland's hydropower sector as part of
its clean energy drive.

Last October, the state-owned firm raised 13.5 billion yuan (HK$16.55
billion) from its listing in Shanghai, the biggest mainland IPO last
year. Sinohydro has built 65 per cent of China's large and medium-sized
dams, including its largest to date, the Three Gorges Dam, and accounts
for at least half of those built in more than 50 nations, according to
its website. The company has secondary businesses in roads, railways,
building construction and wind energy.

Sinohydro plans to increase its new orders by 21.2 per cent to 155
billion yuan this year, of which domestics orders are targeted to soar
44 per cent to 98.1 billion yuan, while international orders are
expected to drop 4.8 per cent to 56.9 billion yuan, according to a
document on its 2011 annual general meeting.

However, the company aims to boost overseas revenue by 16.1 per cent to
33.5 billion yuan this year, while it expects domestic revenue to grow
at a slower pace of 7.9 per cent to 89.6 billion yuan and total revenue
to rise 8.5 per cent to 123.1 billion yuan.

Sinohydro hopes to have a gross profit of at least 5 billion yuan this
year, compared to last year's gross profit of 4.99 billion yuan. The
company plans to invest 26.88 billion yuan in 110 ongoing projects and
12 new projects this year.

"The company believes the global construction market will maintain
stable growth, while in 2012 China will push water infrastructure in a
big way. China's efforts to save energy and reduce emissions will
accelerate demand for hydropower and new energy, while the company will
further raise the level of its 'going out' internationalisation push,"
the company said.

"As such, the company will maintain excellent growth in domestic
hydropower construction and international infrastructure projects."

The mainland has a total installed capacity of 25,000 megawatts of
hydropower in use or under construction, according to Sinohydro's website.

The 12th five-year plan from 2011 to 2015 calls for the addition of
40,000 MW of hydropower.

At present, hydropower accounts for only 3 per cent of the installed
capacity of mainland power generation, with most of it from more
polluting coal-fired plants, according to Sinohydro's website.

In April, the nation's electricity generation grew 2.7 per cent to 386.9
million MWh, of which coal-fired electricity inched up 0.1 per cent to
319.6 million MWh, hydropower surged 13 per cent to 47.7 million MWh,
and nuclear energy rose 12 per cent to 7.5 billion MWh, according to
official data.

However, Sinohydro's overseas ambitions may cause environmental controversy.

A recent report by International Rivers, a green NGO, has criticised
large-scale dam projects around the world.

"Large dams have a history of cost overruns and questionable economics.
They typically have been built without public participation, and have
increased societies' vulnerability to corruption and climate change.
Centralised projects often had a massive social impact on local
communities, but their benefits have largely bypassed the rural poor,"
the International Rivers report said.

"International Rivers is not in principle opposed to dam building. But
the strong focus on large hydropower projects is misguided, and better
options are usually available," the report said.


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Wednesday, May 23, 2012

Making infrastructure work for the poor

Making infrastructure work for the poor
By Peter Bosshard
Reuters AlertNet, May 23, 2012

Kikwit is a town of almost one million people in the Democratic Republic
of Congo (DRC). Its inhabitants have no access to electricity. Because
the water pumps are no longer working, they have no access to clean
water either. In the 1990s, the town made news through an outbreak of
the deadly Ebola virus, which was helped by the poor sanitary conditions.

Kikwit is not located at the end of the world. It lies underneath the
power lines of the Inga dams on the mighty Congo River. Yet the electric
current that hums overhead is not meant for poor people. It is exported
to the mining companies in the southern Katanga province.

Over the past decades, billions of dollars have been invested in the
DRC's power sector. They have created a stark energy divide: 85 percent
of the country's electricity is consumed by energy-intensive industries,
while 94 percent of the population has no access to electricity.

There can be no prosperity without infrastructure. But infrastructure
has many faces: it supplies water to poor communities and irrigates golf
courses, builds local access roads and bridges to nowhere.

The example from the Congo Basin demonstrates that infrastructure
investment can bypass poor people completely for the benefit of powerful
interests. Globally, more than one billion people live without access to
clean water, sanitation, and electricity.

In recent years, infrastructure has one again become a buzzword of the
international development debate. The World Bank and the powerful Group
of 20 have prepared new strategies for the hardware of development. They
propose to concentrate investment on large projects with private
participation such as big dams and transport corridors that can
transform whole regions.

They have identified the Inga hydropower scheme on the Congo River as an
exemplary project for their new approach. At a cost of $80 billion, this
project would produce electricity for export - and perpetuate the DRC's
energy divide in the process.

The strategy of the World Bank and G20 will generate contracts for
global corporations, financing deals for big banks, and opportunities
for politicians to cut ribbons and bag some kickbacks along the way. Yet
by hoping that social and economic development will trickle down to poor
people such as the inhabitants of Kikwit, it ignores the lessons of past


A new report by International Rivers demonstrates that a different
approach is available. Most rural poor in Africa and South Asia - the
epicenters of global poverty - live closer to local sources of renewable
energy than to the electric grid.

The International Energy Agency proposes that 70 percent of the
investment needed to provide energy for all should go into local
mini-grids and off-grid solutions such as micro hydropower, solar, and
wind. The cost of these technologies has fallen rapidly in recent years.

High-quality solar lanterns light family homes and charge cell phones at
less than half the cost that poor consumers pay for dirty kerosene and
candles every year. Yet the markets for poor consumers don't work
properly, and new technologies are often not available where they are
needed. This is where the World Bank and other donors should come in.

Promoting clean, decentralized energy solutions will not only provide
access for people that have been left in the dark for too long. It will
also boost local economic sectors such as agriculture, agricultural
processing and tourism, which are important for broad-based job creation.

It will reduce the social and environmental footprint of energy
projects. By diversifying and decentralizing supply, the same approach
will make energy sectors more resilient to the vagaries of climate
change. It will also strengthen the institutions of local governments
and civil society, which are often overwhelmed by large, top-down
infrastructure projects.

In July, a new World Bank President will take office. Jim Yong Kim has
made great contributions to improving public health by empowering poor
local communities. A similar change of course is called for in the
infrastructure sector.

The World Bank should shift its ample resources - its lending,
guarantees, technical assistance and policy advice - from the top-down
projects of the past to the bottom-up solutions of the future. The new
presidency offers an opportunity to finally address the global
infrastructure divide.

Peter Bosshard is policy director of International Rivers and the author
of the new report, Infrastructure for Whom? The report is available at

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Wednesday, May 16, 2012

Report Calls on New World Bank President to Change Course on Infrastructure

[Apologies for cross-posting]

Report Calls on New World Bank President to Change Course on Infrastructure
International Rivers, May 16, 2012

Infrastructure lending has once again become the World Bank's core
business. A new report by International Rivers reviews the Bank's track
record in the sector, and calls on the new Bank President to replace the
top-down approach to infrastructure with a strategy that prioritizes the
needs of the poor.

In November 2011, the World Bank and the Group of 20 prepared new
strategies for infrastructure development. They proposed concentrating
public finance on large projects with private participation that can
transform whole regions. The Bank and the G20 identified the giant Inga
hydropower scheme on the Congo River as an example of the proposed approach.

A report published by International Rivers today reviews the track
record of the infrastructure strategy that was proposed by the World
Bank and the G20. Entitled, Infrastructure for Whom?, the report finds
that the focus on large, centralized projects has benefited
energy-intensive industries, but bypassed more than a billion poor
people in Sub-Saharan Africa and South Asia. Donors spent billions of
aid dollars for dams and transmission projects at the Inga site on the
Congo River, but 94% of the population in the DRC still has no access to
electricity. The benefits of centralized mega-projects have not trickled
down to the poor.

A better approach is available. The new report finds that most rural
poor live closer to local sources of renewable energy and water than to
an electric grid and centralized irrigation systems. It argues that
decentralized projects that address the needs of poor people directly
are more effective at promoting broad-based economic growth and reducing
poverty than centralized mega-projects. Small- scale energy and water
projects can also strengthen climate resilience, reduce the social and
environmental footprint of the infrastructure sector, and strengthen
democratic control over essential public services.

Peter Bosshard, policy director at International Rivers and author of
the new report, comments: "Infrastructure includes local access roads
and bridges to nowhere, water supply for the poor and irrigation canals
for biofuels. The World Bank needs to start prioritizing projects that
directly address the needs of the poor. Decentralized approaches have a
better track record of reducing poverty than the top-down projects of
the past."

Jim Yong Kim will take office as the World Bank's new President in July.
Dr. Kim has done pioneering work in the public health sector by working
directly with poor communities. International Rivers has shared a copy
of the new report with the new Bank President, and urged him to
prioritize the needs of poor communities in his infrastructure agenda.
Copies of the report were also sent to the World Bank's management and
member governments.

The new report, Infrastructure for Whom?, is available at
www.internationalrivers.org/infrastructureforwhom. Hard copies can be
requested from Kate Ross at kross@internationalrivers.org.

This is International Rivers' mailing list on the role of international financial institutions in promoting large dams.

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Study on 'environmental flows' of rivers must

Study on 'environmental flows' of rivers must
GUWAHATI, May 7, 2012

Ignoring the crucial linkages of a river's upstream, midstream, and
downstream flows can endanger not just the river, but human communities
and ecology sustained by it. A disregard of 'environmental flows,' by
construction of dams, has already harmed many rivers in the Western
Ghats, giving rise to political as well as environmental issues.

This was emphasized by noted expert on water resources, Latha Anantha of
the River Research Centre, Kerala, in a workshop held at Guwahati yesterday.

Presenting a Primer on Environmental Flows, which she had co-authored
with Parineeta Dandekar, she said, 'There is need to study the
environmental flows of rivers in the North East, before they endure the
impact of dams and closure of basins… as dams are the direct and often
irreversible modifiers of flows.'

With reference to the scenario in Western Ghats, the environmentalist
said that dams on some rivers have adversely affected the ecology and
agricultural prospects of many communities. It has also resulted in
conflict of interest among states such as Tamil Nadu, Karnataka and
Kerala, which have seen no resolution for decades.

On the proposed interlinking of Indian rivers, she criticised the plan
describing it as 'tweaking' it with nature. 'Who are we to twist rivers
like pipes!'

Anantha, from her experience in peninsular India, pointed out that many
dams have witnessed siltation. Moreover, in the Himalayan rivers such as
Bhagirathi, the effects are much more telling – the Tehri dam had
substantial silt accumulation after a two-year period.

According to her, disruptions in river flows due to human intervention
affected not just ecological, morphological and hydrological spaces, but
also undermined economic, spiritual and cultural values related to
rivers. Therefore, a concerted effort involving technical experts and
local communities was needed to ensure that rivers can maintain their
environmental flows.

Inaugurating the workshop on environmental flows organised by the
conservation group Aaranyak and River Research Centre, with support from
International Rivers, Prof Dulal Goswami said that the concept of
environmental flows has gained more relevance in recent times. Its
application could bring in better understanding about some of the major
rivers in the Northeast.

Other participants who took part in an open house session mentioned the
threats to several rivers in the Northeast, and agreed that increased
community involvement was required to shape the policy on rivers and
other wetlands.

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Tuesday, May 15, 2012

Keeping an eye on China’s bankers

[Green Watershed�s annual Environmental Report on Chinese Banks (2011)
is the only project in China to comprehensively investigate and rank the
environmental performance of China's banks.]

Keeping an eye on China�s bankers
By Wang Haotong
May 14, 2012


Last August, a major pollution story broke in China: 5,000 tonnes of
toxic chromium tailings had been dumped near a Yunnan reservoir,
contaminating water supplies and killing livestock. Worse revelations
were to come. The company behind the incident, Luliang Chemicals, had
been illegally discarding chromium slag by south China�s Nanpan River
for more than a decade � 280,000 tonnes of it in total.

China�s environmental activists had questions, and not just about the
local governance and company management that had allowed such
devastating pollution to go unchecked for so long. Campaigners, led by
Yunnan-based NGO Green Watershed, also wanted the government to publish
details of the financial institutions that had provided financial
backing to Luliang. They wanted to know which banks had lent the company
money and details of the regulatory response to the disaster.

Green Watershed put these questions in a freedom of information request
and filed it with the Kunming branch of the People�s Bank of China, the
provincial banking regulator and the provincial environmental
authorities. It also organised an open letter, signed by 24 Chinese
NGOs, asking China�s 16 listed banks to disclose whether or not they had
made loans to the company and two connected firms. This was the first
time such a request had been made in response to a major pollution
incident in China.

The freedom of information request was refused: by the People�s Bank of
China due to "commercial secrecy"; by the environmental authorities due
to "scope of government function"; and by the banking regulators on
grounds of "information technology limitations". Only two banks, Pudong
Development Bank and Industrial Bank, responded to the open letter, each
stating that it had no lending relationship with Luliang Chemicals. The
other 14 remained silent.

Unlike financial institutions in most of the world�s leading economies,
China�s banks are still able to keep a closed lid on the ecological and
social impacts of their lending decisions, as the Luliang case makes
abundantly clear. But civil society activism in this sector offers room
for hope. And there are signs that NGOs may be starting, slowly, to
prize open that lid.

The latest environmental rankings of the country�s listed banks,
published last month by Green Watershed and partners, is a case in
point. The existence of these rankings points to growing levels of
public supervision over China�s financial sector, and is raising hopes
for more systemic financial regulation from both industry and government.

Green Watershed was the first of China�s NGOs to start advocating for
social responsibility and green lending in the banking sector, back in
2002. The years since have seen some progress. In 2007, the State
Environmental Protection Agency (now the Ministry of Environmental
Protection) together with the People�s Bank of China and the China
Banking Regulatory Commission (CBRC) issued a document on limiting
credit to polluting industries, considered the launch-pad for China�s
green credit policy. Following this, CBRC and the People�s Bank of China
released a string of guidance documents, in a bid to make loans to
energy efficient and low-emissions industries an important factor in the
rating of banking institutions.

Though seen as a bold move, the green credit scheme has faltered in
implementation. Transparency on lending decisions remains weak and
environmental performance a long way from global standards. In this
context, NGOs have continued to push for improvements: in 2008 Green
Watershed launched a discrete project on "Green Credit Advocacy", and
since 2009 it has carried out an annual assessment of banking performance.

At the end of April this year, Green Watershed published the
Environmental Record of Chinese Banks (2011), the third edition of the
annual study which tracks and evaluates the environmental performance of
China�s listed financial institutions, compiled in partnership with
seven other Chinese NGOs. (Rather confusingly, though the report was
published this year, it is labelled 2011 and uses data from 2010.)

The 16 banks investigated are: Industrial and Commercial Bank of China
(ICBC), Bank of China, China Construction Bank, Agricultural Bank of
China, Bank of Communications, China CITIC Bank, China Minsheng Bank,
China Merchants� Bank, Industrial Bank, Shanghai Pudong Development
Bank, China Everbright Bank, Bank of Beijing, Huaxia Bank, Shenzhen
Development Bank, Bank of Nanjing and Bank of Ningbo.

The report drew on four sources of information. First, the authors used
the banks� own publications, such as corporate social responsibility
reports, annual reports and corporate websites. Second, they looked at
information on the websites of the banking regulators. And third, they
analysed reports in Chinese or foreign media on the lending and
investment activity of the banks, or their environmental performance.
Lastly, a questionnaire was sent to each institution, though this proved
a limited stream: only three institutions, the Industrial and Commercial
Bank of China, Shenzhen Development Bank and the Industrial Bank, responded.

Green Watershed and its partners used the collected information to rank
the banks based on 11 indices: environmental transparency; environmental
policies; use of environmental measures; existence of a designated
environmental department; loans to polluting or energy-hungry firms;
environmentally friendly loans; reputation; adherence to international
environmental norms; internal environmental performance; peer and client
advocacy; and overseas impact.

Overall, the environmental transparency of the banks was deemed to have
improved across the board since last year�s report. The best performers
were: Industrial Bank, Industrial and Commercial Bank of China, Shanghai
Pudong Development Bank, China Merchants� Bank and Shenzhen Development
Bank. Agricultural Bank of China, Beijing Bank, Nanjing Bank, Ningbo
Bank and Everbright Bank, brought up the rear.

The positions of ICBC, CITIC, Industrial Bank, Shanghai Pudong
Development Bank, Huaxia Bank and Shenzhen Development Bank had improved
since the previous rankings. But Construction Bank of China, Bank of
Communications, China Merchant�s Bank, Bank of Beijing, Bank of Nanjing
and Bank of Ningbo had all fallen. The Bank of China and China Minsheng
Bank staying in the same positions as last year, while Agricultural Bank
of China and Everbright Bank were new additions to the list.

Whether or not banks subscribe to international environmental norms is
an important marker of their performance in this area. But the number of
Chinese financial institutions adopting global green-lending standards
has stayed stubbornly low. Industrial Bank has outstripped its peers
here, having signed up to the Equator Principles � a voluntary set of
standards for assessing social and environmental risk in project
financing � as well as the United Nations Environment Programme�s
Finance Initiative (UNEP FI) and the Carbon Disclosure Project, a scheme
that tracks the carbon emissions and climate actions of the world�s
biggest firms.

China Merchant�s Bank has also joined UNEP FI, while ICBC is a member of
the Carbon Disclosure Project. China Construction Bank, Minsheng Bank
and CITIC have made preparations to join the list of signatories to the
Equator Principles, but are yet to actually do so. There is no news of
any other Chinese bank preparing to adopt any international standards.

Green Watershed�s annual reporting project is the only scheme in China
to comprehensively investigate and rank the environmental performance of
the country�s banks. That it is being produced by people outside the
financial sector is telling. And it should spur China�s financiers to
take the reins and get their houses in order.

In 1974, the world�s first environmental and social full services bank,
GLS Bank, was founded in Germany, set up specifically to provide
preferential loans to the ecological, social and cultural projects that
normal banks often weren�t interested in. In the decades since, Germany
has developed a mature set of green lending policies and mechanisms and
the Equator Principles have been adopted throughout its banking sector.
The government is also actively involved in developing green-credit

In the United States, commercial banks have clear social obligations
enshrined in law, including towards the environment. And there has been
a shift from shareholder-value orientated corporate structures towards
stakeholder theory, which acknowledges the need to consider the
interests of different participants, such as customers, staff and
society. Banks in the United Kingdom, Japan and Canada generally apply
the Equator Principles and operate green-lending policies.

In China too, there are stirrings of change, as the financial system
itself responds to expressions of public oversight. On February 24 this
year, CBRC published guidelines on green lending, providing a regulatory
framework that has been warmly welcomed by environmental campaigners.
Could a new order for Chinese finance be on its way at last?

Wang Haotong is a journalist based in Beijing.

This article is published as part of our Green Growth project, a
collaboration between chinadialogue and the Energy Foundation.

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