CAO Cases

Arne Hoel, The World Bank

Sub-Saharan Africa

Uganda / Bujagali Energy-06/Bujagali

Complainant
Former Bujagali construction workers
Date Filed
April 03, 2013
Concerns
Unpaid wages
Case Status
Open - Compliance
 

Synopsis

Complaint
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 Limited 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.

 

The complaint was filed by the Chairman of an informal association of former Bujagali construction workers acting on behalf of himself and over 300 workers at the construction camp and dam site. The complainants raise concerns about unpaid wages and benefits from as far back as 2008.

 

CAO Action
CAO found the complaint eligible for further assessment in April 2013. The assessment concluded in November 2013 with the parties agreeing to engage in a voluntary dispute resolution process facilitated by CAO. During the discussions on the dispute resolution process design the parties were unable to reach consensus on how to move forward. Given this impasse, CAO brought the dispute resolution process to a close in November 2014. In accordance with CAO’s Operational Guidelines, the case was transferred to the CAO compliance function for appraisal of IFC’s/MIGA’s performance with regard to the project.

 

In April 2015 CAO completed a compliance appraisal with regard to both the Bujagali 04 and 06 complaints. On the basis of the appraisal CAO decided to conduct a compliance investigation into IFC's investment in Bujagali. The CAO investigation will assess whether IFC reviewed and supervised labor-related aspects of the project, in particular occupational health and safety issues, as required by Performance Standard 2. The investigation will also consider IFC’s approach to the issues of workers’ compensation given the commitments to “avoid […], minimize, mitigate prevent or compensate for adverse impacts on workers” set out in in its Policy on Social and Environmental Sustainability and Performance Standard 1.

 

Status

CAO finalized its investigation report and sent it to IFC/MIGA's management for official response on November 3, 2017. IFC/MIGA have 20 days to submit a response to the investigation report.

 

 

Status as of November 3, 2017

Project information

Institution
IFC & MIGA
Project Name & Number
Bujagali Energy Ltd 24408 (IFC) & 6732 (MIGA)
Department
Infrastructure
Company
Bujagali Energy (IFC); World Power Holdings (MIGA)
Sector
Utilities
Region
Sub-Saharan Africa
Country
Uganda
Environmental Category
A (IFC)
Commitment
$100m A & C loans (IFC), $115m guarantee (MIGA)

Case Tracker

Ombudsman

  • Eligible: Completed
  • Assessment Period: Completed
  • Facilitating Settlement: Transferred

Compliance

  • Under Appraisal: Completed
  • Under Audit: In Process