Major hydropower projects in
Democratic Republic of the Congo,
Zambia,
Nepal
and elsewhere – all of a scale dubbed "transformational" to the regions
involved – are part of the bank's fundraising drive among wealthy
nations. Bank lending for hydropower has scaled up in recent years, and
officials expect the trend to continue.
Such projects were shunned
in the 1990s, in part because they can be disruptive to communities and
ecosystems. But the World Bank is opening the taps for dams and related
infrastructure as its president, Jim Yong Kim, tries to resolve a
quandary at the bank's core: how to eliminate poverty while adding as
little as possible to
carbon emissions.
"Large
hydro is a very big part of the solution for Africa and south Asia and
south-east Asia ... I fundamentally believe we have to be involved,"
said Rachel Kyte, the bank's vice-president for sustainable development
and an influential voice among Kim's top staff members. The earlier move
out of hydro "was the wrong message ... That was then. This is now. We
are back."
It is a controversial stance. The bank backed out of
large-scale hydropower because of the steep trade-offs involved. Big
dams produce lots of cheap, clean electricity, but they often uproot
villages and destroy the livelihoods of the people the institution is
supposed to help. A
2009 World Bank review of hydropower
noted the "overwhelming environmental and social risks" that had to be
addressed but also concluded that Africa and Asia's vast and largely
undeveloped hydropower potential was key to providing dependable
electricity to the hundreds of millions of people who remain without it.
"What's the one issue that's holding back development in the poorest countries? It's
energy. There's just no question," Kim said in an interview.
Advocacy groups remain sceptical, arguing that large projects, such as Congo's long-debated network of
dams around Inga Falls, may be of more benefit to mining companies or industries in neighbouring countries than poor communities.
"It is the old idea of a silver bullet that can modernise whole economies," said Peter Bosshard, policy director of
International Rivers,
a group that has organised opposition to the bank's evolving hydro
policy and argued for smaller projects designed around communities
rather than mega-dams meant to export power throughout a region.
"Turning
back to hydro is being anything but a progressive climate bank," said
Justin Guay, a Sierra Club spokesman on climate and energy issues.
"There needs to be a clear shift from large, centralised projects."
The
major nations that support the World Bank, however, have been pushing
it to identify such projects – complex undertakings that might happen
only if an international organisation is involved in sorting out the
financing, overseeing the performance and navigating the politics.
The
move toward big hydro comes amid Kim's stark warning that global
warming will leave the next generation with an "unrecognisable planet".
That dire prediction, however, has left him struggling for how best to
respond and frustrated by some of the bank's inherent limitations.
In
his speeches, Kim talks passionately about the bank's ability to
"catalyse" and "leverage" the world to action by mobilising money and
ideas, and he says he is hunting for ideas "equal to the challenge" of
curbing carbon use. He has criticised the "small bore" thinking he says
has hobbled progress on the issue.
However, the bank remains in
the business of financing traditional fossil-fuel plants, including
those that use the dirtiest form of coal, as well as cleaner but
carbon-based natural gas infrastructures.
Among the projects likely to cross Kim's desk in coming months, for example, is a 600-MW power plant in
Kosovo that would be fired by
lignite coal, the bottom of the barrel when it comes to carbon emissions.
The plant has strong backing from the
United States,
the World Bank's major shareholder. It also meshes with one of the
bank's other long-standing imperatives: give countries what they ask
for. The institution has 188 members to keep happy and can go only so
far in trying to impose its judgment over that of local officials. Kim,
who in his younger days demonstrated against World Bank-enforced
"orthodoxy" in economic policy, now may be hard-pressed to enforce an
energy orthodoxy of his own.
Kosovo's domestic supplies of
lignite are ample enough to free the country from imported fuel. Kim
said there is little question Kosovo needs more electricity, and the new
plant will allow an older, more polluting facility to be shut down.
"I
would just love to never sign a coal project," Kim said. "We understand
it is much, much dirtier, but ... we have 188 members ... We have to be
fair in balancing the needs of poor countries ... with this other
bigger goal of tackling climate change."
The bank is working on
other ideas. Kim said he is considering how the bank might get involved
in creating a more effective world market for carbon, allowing countries
that invest in
renewable energy
or "climate friendly" agriculture to be paid for their carbon savings
by industries that need to use fossil fuels. Existing carbon markets
have been plagued with volatile pricing – Europe's cost of carbon has
basically collapsed – or rules that prevent carbon trading with
developing countries.
"We've got to figure out a way to establish a stable price of carbon," Kim said. "Everybody knows that."
He has also staked hope for climate progress on developments in agriculture.
Hydropower
projects, however, seem notably inside what Kim says is the bank's
sweet spot – complex, high-impact, green and requiring the sort of joint
public and private financing Kim says the bank can attract.
The
massive hydropower potential of the Congo river, estimated at about
40,000MW, is such a target. Its development is on a list of top world
infrastructure priorities prepared by the World Bank and other
development agencies for the Group of 20 major economic powers.
Two
smaller dams on the river have been plagued by poor performance and are
being rehabilitated with World Bank assistance. A third being planned
would represent a quantum jump – a 4,800MW, $12bn giant that would move
an entire region off carbon-based electricity.
The
African Development Bank
has begun negotiations over the financing, and the World Bank is ready
to step in with tens of millions of dollars in technical-planning help.
"In
an ideal world, we start building in 2016. By 2020, we switch on the
lights," said Hela Cheikhrouhou, energy and environment director for the
African Development Bank.
It is the sort of project that the
World Bank had stayed away from for many years – not least because of
instability in the country. But as the country tries to move beyond its
civil war and the region intensifies its quest for the power to fuel
economic growth, the bank seems ready to move. Kim will visit Congo this
month for a discussion about development in fragile and war-torn
states.
Kyte, the World Bank vice president, said the Inga project will be high on the agenda.
"People
have been looking at the Inga dam for as long as I have been in the
development business," she said. "The question is: Did the stars align?
Did you have a government in place? Did people want to do it? Are there
investors interested? Do you have the ability to do the technical work?
The stars are aligned now. Let's go."
This article appeared in Guardian Weekly
, which incorporates material from the Washington Post