Tanzania's hydropower felled by changing climate?

http://allafrica.com/stories/201401290730.html?viewall=1

Tanzania Grapples With Higher Electricity Costs

BY KIZITO MAKOYE 

28 JANUARY 2014

 

Dar es Salaam — When Omar Mganga bought his latest stock of pre-paid electricity coupons via his smartphone, the confirmation message came as a shock. On January 1, the country's state-run power company increased its rates by 40 percent, meaning Mganga got far less energy than expected for his cash.

"This is daylight robbery! How on earth can they increase the tariffs that much within a short period of time? I don't think I can manage," complained the 37-year-old barbershop owner.

As increasingly variable rainfall cuts hydropower production, TANESCO, Tanzania's state-run power utility, has substantially hiked electricity tariffs, a move experts fear could lead to greater deforestation as cash-strapped power users turn to wood and charcoal for cooking.

Newly discovered reserves of natural gas in Tanzania could eventually help meet rising power demand and lower the use of polluting oil-powered generators. But the loss of hydropower capacity threatens to raise the country's emissions of climate-changing gases, while making life much harder for energy consumers.

Mganga, whose shop sits on Shekilango Road in the sprawling Sinza suburb, is among thousands of electricity customers in Tanzania who are bearing the brunt of higher power tariffs, with the effects spreading into every sector of the economy.

Tanzania's Energy and Water Utilities Regulatory Authority (EWURA) announced a 40 percent increase in electricity tariffs, and an almost 16 percent increase in the price of cooking gas cylinders, effective January 1, 2014, with the aim of bailing out the firm from huge losses caused by higher operating costs.

"The proposed tariff adjustment will enable the firm to meet operational costs and increase capacity needed to meet system peak demand," said Felix Ngalamgosi, EWURA's director of regulatory economics.

According to EWURA, ordinary domestic users will now pay 100 Tanzanian shillings (about 6 cents) per unit of electricity, up from 60 shillings before. This means that a government clerical worker receiving a minimum wage of 150,000 shillings ($99) per month will have to set aside about 30 percent of his salary to cover energy costs.

According to EWURA, power consumers such as medium-sized manufacturers whose demand exceeds 7,500 units per month will now pay 205 shillings per unit, an increase of 55 percent.

TANESCO's customers who are connected to the high-voltage supply, including those running factories and mines, and who use 66,000 units and above will pay 159 shillings per unit, 50 percent more than before.

INFLATION RISING

To cope with his spiralling running costs, Mganga has had no choice but to raise the prices at his salon. He now charges 5,000 shillings ($3) for a head and beard shave, an increase of 2,000 shillings.

"I don't mean to chase away customers, but there's no way out. Our landlord has just increased his rent. If we don't do this how are we going to pay him?" Mganga asked.

He has already lost a significant number of his customers, he said.

"It is a painful reality of life. I hope some of them will come back," he said.

Many Dar residents have expressed anger over the rising power tariffs and urged the government to disband EWURA, the regulatory agency, for failing in its mandate to protect customers from unreasonable fuel, water and electricity price increases.

"Let's dissolve it. We are fed up," said Daniel Kabati, a resident of Dar's Kawe neighbourhood. "We are being punished with ridiculously high energy costs almost every year."

Analysts say the rise in energy costs will hurt businesses as well as trigger inflation.

According to the Confederation of Tanzania Industries (CTI), the increases will hurt small and medium enterprises because electricity forms a big share of their production costs.

"It is too early to tell what will happen to manufacturers, but obviously the effect will be huge since the cost of production for locally made products will go up," said Hussein Kamote, CTI's director of policy and research.

HYDROPOWER CHALLENGES

Tanzania's electricity sector faces many challenges. Hydropower, which constitutes 71 percent of electricity generation, is frequently crippled by droughts caused by changing weather patterns.

Faced with shortages, TANESCO has increasingly been forced to use costly emergency generation plants, plunging the company into the financial doldrums. It spends about $3.3 million a day on heavy furnace oil to produce 365 megawatts (MW) of electricity from the emergency plants, but its daily revenue is only $1.4 million. The government is covering the extra costs.

Despite the protests by consumers, the government maintains that Tanzania still has the lowest power tariffs per unit in the region.

"Tanzanians pay less for power because the government subsidises the remaining cost," Sospeter Muhongo, the country's minister for energy and mineral resources, said in an interview with a local radio station.

Tanzania recently discovered huge reserves of natural gas in excess of 43.7 trillion cubic feet (1.2 trillion cubic metres), which has the potential to substantially curb electricity production costs when it becomes available for use. According to the energy ministry, that will happen in the next 10 years.

"With natural gas, we can generate up to 3,500 MW of electricity. Electricity problems will be history," Muhongo said during a public symposium held at the University of Dar es Salaam.

FOREST THREAT

Environmental experts, however, worry that for now the rise in electricity and cooking gas tariffs is likely to exacerbate the already alarming rate of deforestation.

Charcoal and firewood comprise about 90 percent of energy used for cooking in the country. The annual supply of wood needed to meet the demand for charcoal is about 30 million cubic metres.

Meanwhile, a 15kg cylinder of cooking gas now costs 62,500 shillings ($39), an increase of 8,500 shillings.

"The rise in power and cooking gas tariffs will exert more pressure on forests as people seek to use more charcoal and firewood for energy purposes," said Felician Kilahama, a retired senior conservationist with the Ministry of Tourism and Natural Resources.

"If we are to protect forest ecosystems, the government should have accorded high priority to forest protection and conservation, and where necessary provide subsidies to allow many households to afford alternative cooking sources of fuel," Kilahama said. - Thomson Reuters Foundation

Kizito Makoye is a journalist based in Dar es Salaam.

Read the original of this report on AlertNet Climate, the Thomson Reuters Foundation's daily news website on the human impacts of climate change.

U.S. opposes World Bank push toward ‘big hydro’, calls for outside oversight

http://www.washingtonpost.com/business/economy/us-pushes-for-outside-oversight-of-world-bank-opposes-push-toward-big-hydro/2014/01/24/fb41bb7c-8516-11e3-8099-9181471f7aaf_story.html


U.S. pushes for outside oversight of World Bank, opposes push toward 'big hydro'

Jan. 25, 2014

By Howard Schneider
The United States is demanding stricter oversight of World Bank projects amid concern that the bank has slipped in how closely it guards against violence, forced resettlement and other conflict associated with the works that it funds.

In a blow to plans set by World Bank President Jim Yong Kim, the United States recently approved an appropriations bill that orders the bank's U.S. board member to vote against any major hydroelectric project — a type of development that has been a source of local land conflicts and controversies through­out the bank's history. The measure also demands that the organization undertake "independent outside evaluations" of all of its lending.


The demand coincides with a spate of disputes between the World Bank, civil society groups and the United States over past bank-funded projects that have been linked to killings of villagers and forcing people from their land. The cases include still-unpaid reparations from a Guatemala dam project from the 1970s in which hundreds of villagers were killed, concern about forced relocations in Ethiopia, and funding for a palm oil and food company whose operations in Honduras in recent years were the scenes of deadly fighting between workers and security guards.

The bank has extensive procedures to guard the rights of local residents and a number of ostensibly independent review bodies inside its bureaucracy. But the growing concerns led Sen. Patrick J. Leahy (D-Vt.), chairman of the Senate appropriations subcommittee on foreign operations, to make a broad call for stricter oversight by an outside organization.

"Senator Leahy does not believe the evaluation process — the internal process — is what the institution needs to provide independent evaluation of the effectiveness of their lending," said David Carle, Leahy's spokesman. "It is time to make clear that [Kim] needs to look outside the institution."

It is not uncommon for Congress to use the appropriations bill to attach strings or recommendations about the operations of international organizations such as the World Bank, where the United States is the largest shareholder and an influential voice on policy.

The recently approved bill included $1.55 billion for the World Bank's concessional lending arm — what a spokesman for the bank called "strong support." But the list of amendments reflects skepticism about some of the central ideas that Kim has laid out since he was nominated to the bank's top job by President Obama two years ago.

Kim has said he wants to steer the bank toward larger "transformational" infrastructure projects and has specifically mentioned the building of large-scale hydroelectric dams in
energy-starved parts of Africa and elsewhere to advance development and tackle climate change.

Carle said that Leahy believes the bank's renewed interest in large hydro projects "is a mistake and wanted to send that message."

Kim also has said the bank should focus more of its work in the world's conflict zones, where close oversight of which companies and projects get funded is even more critical.

In the Honduran case, funding for the Dinant Corp. flowed both directly from the bank's International Finance Corp. and — less transparently — through a Honduran bank that the IFC supported. The IFC was criticized by its internal ombudsman in a recent report for overlooking the risk of violence in the area.

A World Bank spokesman said that the U.S. demand was still being analyzed and that "we will work with the U.S. to understand their views."

The U.S. vote alone would not be enough to block hydroelectric or other projects from moving forward. But the Leahy amendments recommend withholding U.S. funding for the bank unless an outside evaluation process is established.

They also require U.S. Treasury officials and the American member of the World Bank board to pressure the organization to more quickly resolve disputes where "individuals and communities . . . suffer violations of human rights, including forced displacement, resulting from any loan, grant, strategy or policy."

The amendments apply to all international financial institutions, including regional ones such as the Inter-American Development Bank and the African Development Bank. But the focus was on the World Bank, and the measure referred specifically to disputes in Cambodia, Ethi­o­pia and Guatemala.

The Guatemalan case in particular stands out for its level of violence at the time and for the long-standing demand for reparations for the community involved. Construction of the Chixoy Dam in the 1970s was funded by the World Bank and the Inter-American Development Bank. It coincided with a bloody civil conflict, and several hundred villagers were killed and thousands displaced in clashes as the army tried to clear the way for the project.

The uprooted community has struggled since. In 2010, a reparations plan was agreed to by the Guatemalan government, but the money has not been paid. Under the Leahy amendment, U.S. Treasury officials are expected to begin pressuring the World Bank and the IADB to push for payment. There is a separate threat to withhold military training funds from the Guatemalan army unless the reparations are paid.

The bank has suggested using money from existing projects to benefit the affected families, and a spokesperson said the bank would "look for opportunities" to do more.
________________________________________________

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U.S. pushes for outside oversight of World Bank, opposes push toward ‘big hydro’

U.S. pushes for outside oversight of World Bank, opposes push toward
'big hydro'
By Howard Schneider
The Washington Post, January 24, 2014
www.washingtonpost.com/business/economy/us-pushes-for-outside-oversight-of-world-bank-opposes-push-toward-big-hydro/2014/01/24/fb41bb7c-8516-11e3-8099-9181471f7aaf_story.html

The United States is demanding stricter oversight of World Bank projects
amid concern that the bank has slipped in how closely it guards against
violence, forced resettlement and other conflict associated with the
works that it funds.

In a blow to plans set by World Bank President Jim Yong Kim, the United
States recently approved an appropriations bill that orders the bank's
U.S. board member to vote against any major hydroelectric project — a
type of development that has been a source of local land conflicts and
controversies through­out the bank's history. The measure also demands
that the organization undertake "independent outside evaluations" of all
of its lending.

The demand coincides with a spate of disputes between the World Bank,
civil society groups and the United States over past bank-funded
projects that have been linked to killings of villagers and forcing
people from their land. The cases include still-unpaid reparations from
a Guatemala dam project from the 1970s in which hundreds of villagers
were killed, concern about forced relocations in Ethiopia, and funding
for a palm oil and food company whose operations in Honduras in recent
years were the scenes of deadly fighting between workers and security
guards.

The bank has extensive procedures to guard the rights of local residents
and a number of ostensibly independent review bodies inside its
bureaucracy. But the growing concerns led Sen. Patrick J. Leahy (D-Vt.),
chairman of the Senate appropriations subcommittee on foreign
operations, to make a broad call for stricter oversight by an outside
organization.

"Senator Leahy does not believe the evaluation process — the internal
process — is what the institution needs to provide independent
evaluation of the effectiveness of their lending," said David Carle,
Leahy's spokesman. "It is time to make clear that [Kim] needs to look
outside the institution."

It is not uncommon for Congress to use the appropriations bill to attach
strings or recommendations about the operations of international
organizations such as the World Bank, where the United States is the
largest shareholder and an influential voice on policy.

The recently approved bill included $1.55 billion for the World Bank's
concessional lending arm — what a spokesman for the bank called "strong
support." But the list of amendments reflects skepticism about some of
the central ideas that Kim has laid out since he was nominated to the
bank's top job by President Obama two years ago.

Kim has said he wants to steer the bank toward larger "transformational"
infrastructure projects and has specifically mentioned the building of
large-scale hydroelectric dams in
energy-starved parts of Africa and elsewhere to advance development and
tackle climate change.

Carle said that Leahy believes the bank's renewed interest in large
hydro projects "is a mistake and wanted to send that message."

Kim also has said the bank should focus more of its work in the world's
conflict zones, where close oversight of which companies and projects
get funded is even more critical.

In the Honduran case, funding for the Dinant Corp. flowed both directly
from the bank's International Finance Corp. and — less transparently —
through a Honduran bank that the IFC supported. The IFC was criticized
by its internal ombudsman in a recent report for overlooking the risk of
violence in the area.

A World Bank spokesman said that the U.S. demand was still being
analyzed and that "we will work with the U.S. to understand their views."

The U.S. vote alone would not be enough to block hydroelectric or other
projects from moving forward. But the Leahy amendments recommend
withholding U.S. funding for the bank unless an outside evaluation
process is established.

They also require U.S. Treasury officials and the American member of the
World Bank board to pressure the organization to more quickly resolve
disputes where "individuals and communities . . . suffer violations of
human rights, including forced displacement, resulting from any loan,
grant, strategy or policy."

The amendments apply to all international financial institutions,
including regional ones such as the Inter-American Development Bank and
the African Development Bank. But the focus was on the World Bank, and
the measure referred specifically to disputes in Cambodia, Ethi­o­pia
and Guatemala.

The Guatemalan case in particular stands out for its level of violence
at the time and for the long-standing demand for reparations for the
community involved. Construction of the Chixoy Dam in the 1970s was
funded by the World Bank and the Inter-American Development Bank. It
coincided with a bloody civil conflict, and several hundred villagers
were killed and thousands displaced in clashes as the army tried to
clear the way for the project.

The uprooted community has struggled since. In 2010, a reparations plan
was agreed to by the Guatemalan government, but the money has not been
paid. Under the Leahy amendment, U.S. Treasury officials are expected to
begin pressuring the World Bank and the IADB to push for payment. There
is a separate threat to withhold military training funds from the
Guatemalan army unless the reparations are paid.

The bank has suggested using money from existing projects to benefit the
affected families, and a spokesperson said the bank would "look for
opportunities" to do more.
________________________________________________

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Chinese Push Sesan Dam Talks With Hun Sen

Chinese Push Sesan Dam Talks With Hun Sen
Cambodian Daily, 23 January 2014
By Hul Reaksmey

The chairman of the Chinese company whose subsidiary will construct the
Lower Sesan 2 dam met with Prime Minister Hun Sen on Wednesday to inform
him that the dam would be completed in three years' time, Mr. Hun Sen's
assistant said.

Zhang Tingke, vice president of state-owned utility provider China
Huaneng Group, told Mr. Hun Sen that he was in Cambodia to meet with
local partners, including Ang & Associates Lawyer Co. Ltd., owned by
tycoon Kith Meng, to start building the dam, Eang Sophalleth, Mr. Hun
Sen's personal assistant, told reporters after the meeting.

"He [Zhang Tingke] is visiting Cambodia to cooperate with Ang &
Associates Lawyer group to build a hydropower dam and produce
electricity at the Lower Sesan 2," Mr. Sophalleth said.

"He also informed Samdech Prime Minister that this cooperation will push
this the Lower Sesan 2 project forward so that electricity will be
produced in 2017," he said, adding that Mr. Hun Sen welcomed the
company's efforts. "Samdech Prime Minister welcomed China Huaneng Group
and said that Chinese investments rely on the good relationship between
Cambodia and China," Mr. Sophalleth said after the meeting at the Peace
Palace on Wednesday.

Despite environmental concerns by NGOs, Mr. Tingke said that
Hydrolancang International Energy, the subsidiary of Huaneng, would
avoid damaging the environment and people's livelihoods.

However, the $781 million project in Stung Treng province is expected to
displace more than 5,000 residents, impact the livelihoods of more than
100,000 and cause a drop of fish stock by nine percent for the entire
Mekong basin, according to scientists.

(Additional reporting by Denise Hruby)

http://www.cambodiadaily.com/news/chinese-push-sesan-dam-talks-with-hun-sen-50978/?utm_source=rss&utm_medium=rss&utm_campaign=chinese-push-sesan-dam-talks-with-hun-sen
________________________________________________

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US mulling partnership with China in Congo Inga 3 dam project

US mulling partnership with China in Congo Inga 3 dam project

Chinese state-owned firms and US government may end up funding costly
and controversial dam project in Democratic Republic of Congo
By Toh Han Shih, South China Morning Post, Monday, 20 January, 2014
www.scmp.com/business/china-business/article/1409212/us-mulling-partnership-china-congo-inga-3-dam-project

In an unusual move, the US government is considering partnering with
Chinese state firms in financing the US$12 billion Inga 3 dam in the
Democratic Republic of Congo, one of the world's costliest and possibly
most controversial dams.

A Chinese consortium comprising Sinohydro and China Three Gorges Corp,
both state-owned enterprises (SOEs), are bidding for the project,
according to media reports.

If the Chinese consortium wins the contract, this will be the biggest
overseas dam contract ever won by Chinese firms.

Inga 3 will have a capacity of 4,800 megawatts (MW) and is one of the
largest hydropower projects in Africa, according to Peter Bosshard,
policy director of International Rivers, a US nongovernmental
organisation (NGO) opposed to the project.

Bosshard said a partnership for such a massive undertaking between the
US and China is unusual. "I am not aware of any other such case," he added.

Benoit Tshibangu Ilunga, who runs Congo law firm Tshibangu Ilunga &
Partners and is involved in the dam project, told the South China
Morning Post that the US government was interested in partnering with
the Chinese state firms in the project.

During his current visit to China, Rajiv Shah, administrator of the US
Agency for International Development (USAID), discussed co-operation
with Chinese state firms in funding the Inga project, Bosshard claimed,
citing a "well-informed source".

"USAID continues to work with a wide range of partners to determine
whether an Inga dam project would be financially, environmentally,
socially, and politically viable. USAID continues to work to improve
access to electricity in the Democratic Republic of Congo and
sub-Saharan Africa," said a USAID spokesman when asked if Shah was
negotiating partnerships with the Chinese firms to fund the dam.

The Inga 3 dam is part of the Grand Inga plan, an US$80 billion complex
of 11 dams and six hydropower projects on the Congo River in the African
nation. If the Grand Inga plan proceeds, all its dams will have a
combined capacity of 40,000 MW, according to International Rivers. The
project would dwarf the world's biggest dam, China's US$28 billion Three
Gorges Dam, which has a capacity of 22,500 MW.

A group of NGOs, including International Rivers, sent a letter to US
Secretary of State John Kerry and Shah last month, urging Washington not
to support the Inga 3 dam.

"Inga 3 will completely bypass the local population and generate
electricity for the Congo mining sector and South African export market.
It is likely that the project will be affected by rampant corruption,
and may further entrench the country's resource curse," said the NGOs'
letter, which also cited environmental risks.

Last December, Shah told reporters the US government was considering
financing the Inga 3 dam, possibly as part of US President Barack
Obama's "Power Africa" initiative, without specifying the amount.

Obama announced the US$7 billion Power Africa plan to supply electricity
to the continent during his visit to Africa in July last year.

If a Chinese consortium wins the dam contract and USAID carries out its
intention to finance the dam, the US and China will be partners in the
project.

The US and China need not compete over Africa, but can co-operate in
developing the continent, said Charles Stith, director of the African
Presidential Archives and Research Centre at Boston University.

"In principle, economic co-operation between China and the US is a good
thing and can reduce tension. But co-operation should not come at the
expense of the environment," said Bosshard.

The Congo government has prequalified three consortiums to bid for this
project, including the Chinese consortium, according to Bosshard.

The other consortia are a Spanish consortium and a partnership between
SNC-Lavalin of Canada and two South Korean firms, Posco and Daewoo.

The Congo government wants to select the winning bidder by July,
according to media reports.

The biggest international dam contract won by a Chinese firm was signed
last October by Gezhouba and two Argentinean firms, to build two dams in
Argentina worth US$4.71 billion. Gezhouba will contribute US$2.83
billion or 60 per cent of the deal. The two dams would have a capacity
of 1,740 MW.

China is the world's biggest builder and financer of dams, according to
International Rivers.

Sinohydro, the world's largest dam builder, won 61.55 billion yuan
(HK$78.3 billion) of overseas contracts in the first 11 months of 2013,
the firm announced on the Shanghai stock exchange website.

China International Water & Electric Corp, a subsidiary of Three Gorges
Corp, won 17 overseas projects worth more than 11 billion yuan last
year, according to its website.
________________________________________________

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US mulling partnership with China in Congo Inga 3 dam project

US mulling partnership with China in Congo Inga 3 dam project

Chinese state-owned firms and US government may end up funding costly
and controversial dam project in Democratic Republic of Congo
By Toh Han Shih, South China Morning Post, Monday, 20 January, 2014
www.scmp.com/business/china-business/article/1409212/us-mulling-partnership-china-congo-inga-3-dam-project

In an unusual move, the US government is considering partnering with
Chinese state firms in financing the US$12 billion Inga 3 dam in the
Democratic Republic of Congo, one of the world's costliest and possibly
most controversial dams.

A Chinese consortium comprising Sinohydro and China Three Gorges Corp,
both state-owned enterprises (SOEs), are bidding for the project,
according to media reports.

If the Chinese consortium wins the contract, this will be the biggest
overseas dam contract ever won by Chinese firms.

Inga 3 will have a capacity of 4,800 megawatts (MW) and is one of the
largest hydropower projects in Africa, according to Peter Bosshard,
policy director of International Rivers, a US nongovernmental
organisation (NGO) opposed to the project.

Bosshard said a partnership for such a massive undertaking between the
US and China is unusual. "I am not aware of any other such case," he added.

Benoit Tshibangu Ilunga, who runs Congo law firm Tshibangu Ilunga &
Partners and is involved in the dam project, told the South China
Morning Post that the US government was interested in partnering with
the Chinese state firms in the project.

During his current visit to China, Rajiv Shah, administrator of the US
Agency for International Development (USAID), discussed co-operation
with Chinese state firms in funding the Inga project, Bosshard claimed,
citing a "well-informed source".

"USAID continues to work with a wide range of partners to determine
whether an Inga dam project would be financially, environmentally,
socially, and politically viable. USAID continues to work to improve
access to electricity in the Democratic Republic of Congo and
sub-Saharan Africa," said a USAID spokesman when asked if Shah was
negotiating partnerships with the Chinese firms to fund the dam.

The Inga 3 dam is part of the Grand Inga plan, an US$80 billion complex
of 11 dams and six hydropower projects on the Congo River in the African
nation. If the Grand Inga plan proceeds, all its dams will have a
combined capacity of 40,000 MW, according to International Rivers. The
project would dwarf the world's biggest dam, China's US$28 billion Three
Gorges Dam, which has a capacity of 22,500 MW.

A group of NGOs, including International Rivers, sent a letter to US
Secretary of State John Kerry and Shah last month, urging Washington not
to support the Inga 3 dam.

"Inga 3 will completely bypass the local population and generate
electricity for the Congo mining sector and South African export market.
It is likely that the project will be affected by rampant corruption,
and may further entrench the country's resource curse," said the NGOs'
letter, which also cited environmental risks.

Last December, Shah told reporters the US government was considering
financing the Inga 3 dam, possibly as part of US President Barack
Obama's "Power Africa" initiative, without specifying the amount.

Obama announced the US$7 billion Power Africa plan to supply electricity
to the continent during his visit to Africa in July last year.

If a Chinese consortium wins the dam contract and USAID carries out its
intention to finance the dam, the US and China will be partners in the
project.

The US and China need not compete over Africa, but can co-operate in
developing the continent, said Charles Stith, director of the African
Presidential Archives and Research Centre at Boston University.

"In principle, economic co-operation between China and the US is a good
thing and can reduce tension. But co-operation should not come at the
expense of the environment," said Bosshard.

The Congo government has prequalified three consortiums to bid for this
project, including the Chinese consortium, according to Bosshard.

The other consortia are a Spanish consortium and a partnership between
SNC-Lavalin of Canada and two South Korean firms, Posco and Daewoo.

The Congo government wants to select the winning bidder by July,
according to media reports.

The biggest international dam contract won by a Chinese firm was signed
last October by Gezhouba and two Argentinean firms, to build two dams in
Argentina worth US$4.71 billion. Gezhouba will contribute US$2.83
billion or 60 per cent of the deal. The two dams would have a capacity
of 1,740 MW.

China is the world's biggest builder and financer of dams, according to
International Rivers.

Sinohydro, the world's largest dam builder, won 61.55 billion yuan
(HK$78.3 billion) of overseas contracts in the first 11 months of 2013,
the firm announced on the Shanghai stock exchange website.

China International Water & Electric Corp, a subsidiary of Three Gorges
Corp, won 17 overseas projects worth more than 11 billion yuan last
year, according to its website.
________________________________________________

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

You received this message as a subscriber on the list: chinaglobal@list.internationalrivers.org

To be removed from the list, please visit:
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Chinese dam builders gaining muscle | South Sudan civil war no deterrent to Chinese firms

Chinese dam builders gaining muscle

China Daily, 20 January 2014

By Chris Davis

Latin America, with its vast array of powerful and beautiful rivers, may be a relatively recent new frontier for Chinese dam builders, but they are coming on strong now, not only providing hydroelectric power and water for irrigation, but also expanding China's geopolitical clout.

International Rivers, a US-based watchdog that monitors dam building worldwide, said that Chinese dam builders have 22 hydropower projects in total in Latin America, with three completed, seven under construction and 12 in the proposal stage.

All of the projects, except for two of the completed ones in Belize - one on the Chalillo River completed in 2005 and funded by the Canadian International Development Agency and the Vaca Hydroelectric Project completed in 2010 - started after 2010, and really gained momentum after 2011.

Both were built by Sinohydro. The third completed dam, on the Mazar Dudas River in Ecuador, was built by the China National Equipment Corp and funded by the China Development Bank.

"It's fair to say that Chinese dam-building companies are targeting the Latin American market," said International River's China program director Grace Mang.

Sinohydro has dams under construction in Costa Rica - the 50 Megawatt Chucas Hydroelectric Project, scheduled for completion in 2013, and in Ecuador with the Coca Codo Sinclair, a 1,500 MW $1.7 billion project bankrolled by China Exim Bank and scheduled for completion in 2015.

Sinohydro also has two controversial projects in Honduras, one near completion - the 55-meter-high 105 MW dam on the Patuca, which IR says is likely to have impact on the Rio Platano World Heritage site, a threatened tropical rainforest biosphere that has already been put on UNESCO's endangered list because of illegal logging, poaching and general lawlessness from the presence of heavy illegal drug trafficking.

IR warns that Sinohydro's other project in Honduras - the 22 MW Aqua Zarca which started construction in 2013 - could displace communities and reduce access to their water and territory.

Chinese dam builders have two other projects under construction in Ecuador, one by China International Water and Electric Corporation and another by Hydro China, totaling 361 MW and combined price tag of $480 million.

Patricia Adams, executive director of Probe International, a Canadian NGO, told the South China Morning Post that China was expanding its dam-building into Latin America partly for geopolitical reasons.

IR's Peter Bosshard agreed. "There is often a bit of geopolitics involved in these projects," he told China Daily. "Obviously, Brazil has a very active dam-building industry as well and is kind of the regional powerhouse. But there are governments that are trying to become a bit more independent from Brazilian influence, so that is where China plays a more active role in Ecuador."

Of the 12 proposed dam projects under discussion, there is one each in Costa Rica, Guyana, Peru and Argentina, two in Honduras, and six in Ecuador, for upwards of $4.5 billion worth of investment.

Bossard explained that around 2003, dam-builders from China, Brazil, India and Thailand, were appearing on the global market and they weren't initially necessarily concerned with following international environmental and humanitarian standards. They had the view that it was up to the host government to set the standards they wanted to apply in their projects.

It was the beginning of a new trend where these new dam builders over the past 10 years who have pretty much taken over the global market. "Nowadays Chinese companies and financiers are the most important actors in the global hydro-power business," he said.

To pursue its mission, IR had to reinvent the way they worked. "We couldn't just go to Chinese actors and tell them what they should or should not be doing," Bosshard said. "But we felt there was a lot of international experience to offer them, so we started to translate a lot of case studies into Chinese.”

***

South Sudan civil war no deterrent to Chinese firms

South China Morning Post, 20 January 2014

By Toh Han Shih

The conflict has heightened concern but has not stopped billions of dollars of new investment

Hundreds of Chinese nationals and tens of thousands of refugees are fleeing the worsening civil war in South Sudan, yet Chinese companies are still investing billions of dollars in the troubled region.

Since fighting broke out between the government and forces loyal to former South Sudan vice president Riek Machar last December, nearly 80,000 South Sudanese have fled to neighbouring countries, said the United Nations refugee agency.

“Chinese companies, notably CNPC [China National Petroleum Corp], have invested in the country in recent years because of the oil fields there, some of the richest in the continent,” said Lizzie Parsons, the senior China adviser of Global Witness, a British non-governmental organisation (NGO).

“There are certainly risks. The fighting is getting close to the oil regions in South Sudan,” said Robert Kwauk, chief Beijing representative of Blake, Cassels & Graydon, a Canadian law firm.

In late December, the Chinese embassy in South Sudan told reporters 600 to 700 Chinese nationals had been evacuated from South Sudan, while 1,300 Chinese workers remained stationed in that country.

Some Chinese workers have moved from more remote locations in South Sudan to the country’s capital Juba, while skeleton teams are staying on some Chinese project sites to maintain operations.

On Christmas Day last year, 97 Chinese employees of CNPC, the country’s largest state-owned energy firm, arrived in Khartoum, the capital of Sudan, from South Sudan, reported Xinhua.

CNPC’s chief representative in Sudan, Zhao Dong, told Xinhua that CNPC’s oil wells in remote parts of South Sudan have shut down and workers were evacuated from those oil wells.

That news did not seem to deter other Chinese companies from neighbouring Sudan.

On January 9, China Railway Construction Corp (CRCC), a Chinese state-owned rail builder listed in Hong Kong and Shanghai, announced it won a US$1.45 billion contract to build a railway in the eastern part of Sudan.

“The company will closely monitor the security situation and take appropriate measures to protect the security of personnel and assets, and ensure there are no economic losses,” a CRCC spokesman said.

There is a reason for taking on the risk.

“It will be in China’s interest to build infrastructure to transport oil from South Sudan to Sudan,” said Kwauk. Oil production is concentrated mainly in land-locked South Sudan, but the oil needs to be shipped to China through Sudan.

Another firm staying put is Sinohydro, a Chinese state-owned dam-building company which announced on its website on January 3 that it has completed grouting of its dam on the Upper Atbara River. Grouting prevents seepage on a dam.

Sinohydro has built several dams in Sudan, including the US$838 million dam on the Upper Atbara River, according to International Rivers, a US NGO.

“China’s investment into the Sudanese oil sector has rapidly descended into one of its most problematic investments in Africa. The conflict may result in a heightened sense of risk amongst Chinese state-owned enterprises investing in politically unstable parts of Africa,” said Martyn Davies, chief executive of Frontier Advisory, a South African consultancy.

Although the fighting is currently confined to South Sudan, the country of Sudan itself has been a battleground for years.

Clashes occurred between the forces of Sudan and South Sudan along the border in March 2012, according to a report by the International Crisis Group. “Continued instability along the shared border will remain a threat to peace and Chinese interests,” then NGO stated.

Sudan suffered from a nearly uninterrupted civil war from 1955 to 1972 and then from 1983 to 2005.

“To turn a blind eye to the war in South Sudan risks seriously hampering the legitimacy of Chinese companies to operate in the country, which would be a lose-lose situation,” said Harry Verhoeven, convenor of the Oxford University China-Africa Network.

On January 15, China’s Representative to the African Union Xie Xiaoyan reiterated China’s call for a peacefully negotiated solution for the crisis in South Sudan, reported the People’s Daily.

“The conflict is a challenge to China’s long-held policy of non-interference,” said Parsons.