IDB to fund further studies on Amaila hydropower project

The Inter-American Deve-lopment Bank (IDB) is looking to fund further studies relating to the Amaila Falls Hydroelectric Project (AFHP) but whether it would still provide further financing for the project itself is open to question as under a new policy, the United States will be required to vote against multilateral funding for large-scale hydroelectric projects in developing countries.

“Under the new mandate, the US executive directors will have to object to dam projects such as Inga 3 on the Congo, Dasu on the Indus, Adjarala in Togo, Amaila Falls in the rainforest of Guyana, and the dams in the Nam Ngiep and Se-kong river basins in Laos,” said Peter Bosshard, the Policy Director of Inter-national Rivers, a global watchdog group. Before US-based Sithe Global pulled out here last year as the developer of the US$858.2 million, 165 megawatt hydro venture, the AFHP was shrouded in controversy as costs escalated.

The new instructions are contained in the Consoli-dated Appropriations Act, the budget compromise which was approved by the US Senate and House last month and in the section on multilateral financial institutions, the Act says: “The Secretary of the Treasury shall instruct the United States executive director of each international financial institution that it is the policy of the United States to oppose any loan, grant, strategy or policy of such institution to support the construction of any large hydroelectric dam (as defined in ‘‘Dams and Development: A New Framework for Decision-Making,’’ World Commis-sion on Dams (November 2000)).”

According to Bosshard, like the dam industry, the World Commission on Dams basically defines dams as large if they are at least 15 metres high.

The new policy also bars Washington from offering any bilateral assistance that could facilitate certain rights abuses, extractive industries or industrial logging in primary tropical forests. The appropriations bill also requires that the US push multilateral funders, particularly the World Bank, to incorporate new external oversight and evaluation mechanisms for each project they undertake, to ensure that stipulated safeguards are being followed.

The IDB had been expected to partially fund the AFHP and at the time of Sithe Global’s pullout, the Bank was conducting due diligence. With the US being a powerful IDB board member, holding 30% of voting power—the most by far—in the IDB, it is unlikely, given the new policy that the US representative will support the project. However, Bosshard noted that the international financial institutions are free to ignore the position of the US executive directors.

The government is looking at ways to revive the Amaila hydropower project and Prime Minister Samuel Hinds recently told a parliamentary committee that the US position is of concern to Guyana as the AFHP may be one of the projects that the US has to vote against. However, government officials have spoken of Chinese funding filling the gap.

Meantime, the IDB is preparing to fund supplemental endemic fish surveys for the AFHP with funding pegged at US$440,000.

According to the project document, the Bank is supporting the development of the AFHP through a

potential non-sovereign guaranteed loan currently under preparation. A first Techni-cal Cooperation to help support development of the AFHP has been executed, it noted.

The document says that the site of the AFHP is on the Kaieteur plateau in central Guyana and the area is isolated from the lowlands by a substantive escarpment. “The AFHP area of influence includes part of the plateau and the upper reaches of two rivers – the Kuribrong and Amaila Rivers. These rivers have been shown to be sites of high fish species endemism,” it says.

“The project presents a risk of significant conversion of the only known aquatic habitats of a recently described range restricted endemic fish species – Characidium amaila. However, not all possible areas and habitats for this fish have been surveyed to determine if the fish is widely distributed outside of the area of influence,” the document says.

The objective of the technical cooperation is to finance additional targeted surveys for the fish to assist the project sponsor in completing its obligations to meet certain environmental requirements. “These surveys are designed to determine if the species is found in a wider range of habitats and areas than it is presently known from. If the fish can be found in these areas, this would indicate that the AFHP will not result in the significant conversion of a critical natural habitat,” the IDB noted.

The IDB is expected to contract WWF-Guianas through single source selection to provide logistical support to the fish survey specialists and to put together a team of biologists. WWF-Guiana Shield has recent previous experience organizing survey teams on the Kaieteur Plateau including completion of the baseline surveys for the Kaieteur National Park Management Plan, it noted.

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