The Sky is Not the Limit: - Carbon Trade Watch

1.2 Greenwashing privatisationin UgandaThe Prototype Carbon Fund (see “Keyplayers” and “Kyoto and the WorldBank”) has initiated a hydropowerproject in the area of the Uganda WestNile. This project consists of:• Construction of two medium-sizedrun-of-river hydropower plants anddiesel backup generators;• Development of an isolated minigridfor regional electricitytransmission and distribution; and• Replacement of Uganda ElectricityBoard’s (UEB) diesel capacity andprivately owned small diesel enginesand generator sets.These run-of-river plants will be a 5.1MW hydropower plant at the Nyagaksite in Nebbi District. Two years later,a 1.5 MW plant will be constructed inOlewa, Arua District. 1 These are notlarge hydropower projects, such as thecontroversial Bujugali 250 MW dam.Deflecting criticismHowever, the International RiversNetwork, an NGO supporting localcommunities working to protect theirrivers and watersheds, has roundlycriticised the project. They questionthe absence of an EnvironmentalImpact Assessment (EIA) and inparticular the effects of the project onfish and other aquatic life, land usechange and sediment transport. 2According to World Bank OperationalDirectives every project has tocomplete an EIA. However, the PCFinformed IRN that compliance withnormal World Bank rules andprocedures is not required of CleanDevelopment Mechanism projects.Besides that, CDM requires only thehost country to confirm that an EIA hasbeen undertaken in accordance withits own requirements. Furthermore, theEIA is not subject to stakeholdercomments and the validation process. 3Even though PCF claims not to besubject to World Bank rules in itsresponse to IRN, on its website itstates that: “The [World] Bank Grouphas a body of well-developed,mandatory safeguard policies whichapply to all World Bank operations.These are applied to PCF operationsto ensure that they areenvironmentally and socially sound…” 4There seems to be a fundamentalcontradiction in what the PCF says tocritical groups and the rules it has setitself and then fails to put into practice.However one of the basic criteria ofClean Development Mechanism ruleshas already been violated by theproject. Under CDM rules, plannershave to prove that the project wouldnot have taken place anyway. Thetechnical word for this is ‘additionality’.However, the PCF says that it isimpossible to say that the projectwould have happened without theCDM/carbon finance. 5The Uganda Electricity Board (UEB),has been reformed and is slowly beingprivatised. It has been “unbundled”into four units:a. The Uganda Electricity GenerationCompany Limited (UEGCL)b. The Uganda ElectricityTransmissionCompany Limited (UETCL)c. The Uganda Electricity DistributionCompany Limited (UEDCL)d. The Uganda Electricity Board(remnant).On the 22th of July 2002, “Eskomemerged the sole bidder for thegeneration concession (UEGC) andthen teamed up with the UK-basedCDC Globoleq to form a consortium tobid for the distribution company(UEDC). Eskom’s takeover of UgandaElectricity Generation Company(UEGC) is now almost certain afterMinistry of Finance officials describedits bid for the 20-year concession as‘competitive enough’.” 6 [see box Page9]9