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 megawatt (MW) on the River Nile in Uganda. Bujagali Energy Ltd. (BEL) also manages the construction of approximately 100 kilometers of 132 kilovolts (kV) transmission line on behalf of the Uganda Electricity Transmission Company Ltd. (UETCL) to improve transfer of electricity from the plant. IFC’s investment comprises US$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 March 2011, CAO received a complaint submitted by 11 former employees involved in the construction of the plant on behalf of themselves and more than 30 former employees, citing concerns related to labor issues, specifically lack of proper compensation by the plant’s sub-contractor after they suffered injuries in the course of their work.  The complainants also raise concerns regarding the transparency of the compensation process and intimidation of workers requesting their benefits. In total, the complaint comprises 93 individual workers’ cases. 

In March 2011, CAO found the complaint eligible for further assessment. During the assessment, the parties agreed to resolve their concerns through a dispute resolution process.  The dispute resolution process resulted in the resolution of 86 out of 93 workers' cases. Outcomes included the creation of a community-based organization for livelihood activities for complainants and other disabled workers, the revitalization of a Medical Arbitration Board for resolving worker compensation complaints, and a CAO workshop in Uganda to strengthen company grievance mechanisms. In December 2013, six of the remaining unresolved cases were transferred to CAO’s compliance function and merged with a subsequent case (Bujagali-08) for the compliance process.

In April 2015, CAO completed its compliance appraisal related to the Bujagali Energy-04 and 06 cases, which concluded that a compliance investigation was merited. 

In December 2017, CAO published its compliance investigation report. The investigation found that IFC was aware of labor and occupational safety and health (OSH) risks before investing in the project, but inadequately reviewed these issues due to a lack of expertise. This resulted in insufficient technical review of the labor and OSH expertise of the client or the Engineering, Procurement & Construction (EPC) contractor ability to implement Performance Standard (PS) 2 provisions on a large and complex construction project. Consequently, the labor and OSH plans of the client and EPC contractor did not undergo appropriate technical review. Similar shortcomings were noted during project supervision, with IFC failing to allocate enough resources or specialist staff, leading to inadequate oversight of labor, health, and safety risks.

CAO also found that IFC did not ensure that national workers' compensation requirements provided appropriate compensation, relevant to complaints in both Bujagali Energy-04 and Bujagali Energy-06 cases. Additionally, IFC failed to align project outcomes with its Sustainability Policy, which requires the proper handling of adverse impacts. IFC issued a management response to the CAO investigation in December 2017, and CAO commenced monitoring of IFC's corrective actions.

In April 2018, CAO merged a later case also concerning worker health/safety and compensation (Bujagali Energy-08) with the ongoing monitoring of the Bujagali Energy-04 and Bujagali Energy-06 cases.

In May 2018, IFC provided CAO with an addendum to its management response to CAO’s Bujagali Energy-04 and 06 investigation and the separate Bujagali Energy-07 investigation and in June 2018, IFC provided CAO with the Terms of Reference “Review of Available Information – Underpaid Construction Workers, Uganda Consulting Assignment.” CAO initiated the monitoring of the actions listed in the addendum and compliance with the Performance Standards. 

CAO Monitoring Reports

In March 2019, CAO published its First Monitoring Report of IFC/MIGA’s management response to the Bujagali Energy-04, 06, 07, and 08 cases. For the Bujagali 04 and 08 cases, CAO’s monitoring would review the outcomes of IFC’s scoping process once available. CAO’s monitoring report noted delays in the implementation of actions proposed by IFC to address CAO’s findings.

In May 2020, CAO published its Second Monitoring Report. Since the first monitoring report, IFC completed its scoping report which included recommendations for possible additional support to injured workers. The report also identified local institutional capacity to support disabled workers and ongoing client community support programs that can be accessed by this group. 

In September 2022, CAO published a Third Monitoring Report. The report analyzed whether IFC had adequately addressed CAO’s non-compliance findings, building on CAO’s 2019 and 2020 monitoring reports.

IFC initiated an Advisory Services program to support skills and capacity development for some workers injured during project construction. This action would partially address CAO’s findings regarding impacts on injured workers. However, other non-compliances and associated impacts identified by CAO, including those affecting dependents of workers who were killed, remained largely unaddressed.

In May 2024, CAO published its Fourth Monitoring Report.  The report acknowledges IFC's actions in response to CAO's November 2017 non-compliance findings on worker injury compensation at the hydropower project. IFC is still implementing an Advisory Services program to support the livelihoods of injured former workers. Since the project is finalizing the livelihood support activities, CAO will continue to monitor this case.

The Omnibus Monitoring Report, which includes the monitoring report for this case, is available in English.