Uganda / Bujagali Energy-05/Bujagali
The Bujagali Energy project involves the development, construction, and maintenance of a run-of-the-river power plant with a capacity of up to 250 MW on the River Nile in Uganda. Bujagali Energy Limited also manages the construction of approximately 100 kilometers of 132 kV transmission line on behalf of the Uganda Electricity Transmission Company Ltd. to improve transfer of electricity from the plant. Bujagali Energy Ltd is owned by Industrial Promotion Services (Kenya) Ltd. – the industrial development arm of the Aga Khan Fund for Economic Development and SG Bujagali Holdings, Ltd., an affiliate of Sithe Global Power LLC (US). IFC and MIGA are supporting the $750 million project along with several other international financial institutions, including the International Development Association, African Development Bank and European Investment Bank. IFC’s investment comprises $100 million in A and C loans, and MIGA issued a $115 million guarantee to World Power Holdings Luxembourg S.à.r.l., a subsidiary of Sithe Global Power, for its investment in the project.
In May 2011, several community members residing in the Bujagali affected area submitted a complaint to the CAO. The complainants’ concerns relate to compensation for assets during the land acquisition process, damage to houses and impacts to health related to blasting during construction, and compensation for loss of livelihoods.
The CAO found the complaint eligible for further assessment in June 2011. An Ombudsman team has met with the relevant stakeholders on several occasions. The company and the complainants have agreed to undertake a collaborative process to address issues in the complaint with the assistance of the CAO. An Ombudsman assessment report was completed in December 2011 and is available in English and Luganda at the link below.
A complaint raising some of the same issues was also submitted to the Complaints Mechanism of the European Investment Bank (CM-EIB). CAO has coordinated with CM-EIB throughout the Ombudsman intervention.
As detailed in CAO’s January 2016 Monitoring report, issues related to loss of livelihoods were resolved in September 2012 and issues related to the transmission line and the hydro site land compensation are currently under monitoring by CAO’s Ombudsman/Dispute Resolution team (in 2013, CAO changed the name of the “Ombudsman” function to “Dispute Resolution”).
In relation to blasting issues, CAO complainants affected by these issues were not satisfied with the Mediation Solution implemented during 2014 and early 2015 as a result of the mediation process led by EIB-CM and consider the complaint with CAO on these issues unresolved. After consultation with the different parties and request for further mediation by the complainants, it BEL informed CAO it was unable to participate in further mediation. Therefore, given the voluntary nature of CAO’s dispute resolution processes and in accordance with CAO’s Operational Guidelines, the outstanding issues related to blasting impacts have been transferred to CAO Compliance for appraisal in January 2017.
CAO released a compliance appraisal report on March 13, 2017. As a result of the compliance appraisal process, CAO has decided to close this case, concluding that an investigation of IFC/MIGA's performance in relation to blasting impacts of the project was not warranted.
Regarding the CAO-led mediation on the transmission line, complainants' representatives and the Uganda Electricity Transmission Company Ltd. (UETCL) signed a Mediation Agreement which was subsequently adopted by the High Court of Uganda as a Judgment of the Court in May 2015. CAO is monitoring the implementation of the agreement and notes that while UETCL did not fulfill its original commitment in the Mediation Agreement to pay complainants who had accepted compensation during the Disclosure process no later than July 31, 2015, implementation of the agreement is nearly complete. CAO released its Monitoring Report on January 15, 2016, which can be found under "view Documents" below.
The CAO Dispute Resolution team continues to monitor and engage with the parties on issues related the transmission line and hydro site land compensation.
CAO’s compliance function released a compliance appraisal of IFC/MIGA’s social and environmental performance in relation to blasting impacts in March 2017. As a result of the compliance appraisal, CAO has decided to close the case.
Status as of March 13, 2017
- IFC & MIGA
- Project Name & Number
- Bujagali Energy Ltd 24408 (IFC) & 6732 (MIGA)
- Bujagali Energy (IFC); World Power Holdings (MIGA)
- Sub-Saharan Africa
- Environmental Category
- A (IFC)
- $100m A & C loans (IFC), $115m guarantee (MIGA)
- Eligible: Completed
- Assessment Period: Completed
- Facilitating Settlement: Completed
- Monitoring/Close-out: In Process
- Under Appraisal: Closed