Chapter 7 : Disempowering hydropower in Ethiopia, the DRC and Egypt

Chapter 7

Disempowering hydropower in Ethiopia, the DRC and Egypt

 

By Khadija Sharife and Baruti Amisi

Introduction

 

Since the dawn of time, the greatest civilisations were born on the fertile banks of ancient river systems, ranging from Mesopotamia’s Tigris and Euphrates to Egypt’s Nile, China’s Yangtze or Yellow river, and the Indus. Yet the rise of these scientific, economic and commercial powerhouses has not only resulted in technologies seeking to harness the power of rivers as an economic force for good, but also exclusively to dominate this vital source of life through centralised control. Nowhere is hydric injustice so obvious as in Africa, nowhere is the game of hydropolitical poker so lethal and receptive to drought, conflict and corruption as in Africa.

Presently, more than 60 per cent of Africa is dependent on mega-dams as a source of hydroelectric power, this includes Zambia (96 percent), Uganda (99 percent), Mozambique (91 percent), Ethiopia (89 percent) and the Democratic Republic of Congo (99 percent), in conjunction with a host of states including South Africa, Zimbabwe, Togo and Benin. This is mainly because, in Africa, water is a shared affair, with waterways composing at least 40 percent of regional borders.

Since 2007, drought has begun to grip the continent, from the East to the South, bringing chaos in its wake. Currently, Africa supplies just 5 percent of global electrification but hosts more than 500 million people who survive solely on biomass, sunlight, paraffin and candles.

‘Most of the Nile states are dangerously dependent on hydropower, including Burundi, DRC, Ethiopia, Kenya, Rwanda, Sudan, Tanzania and Uganda,’ according to Lori Pottinger, head of Southern African programmes at International Rivers (IR). ‘When a serious drought strikes, a hydro-dependent country also has to cope with water shortages, and reduced agricultural production.’

And drought is certainly on the cards’ — geologists predict a 10-20 per cent decline in rainfall over the next 50 years, estimating that 75 percent of African countries with annual rainfall of 400-1000 mm are partially located in environmentally unstable zones. The UN’s Intergovernmental Panel on Climate Change (IPCC) has declared Africa, ‘the continent most vulnerable to the impacts of projected climate change’, described by geologist Maarten de Wit as, ‘like erasing large sections of the rivers from the map.’

Despite the reality that drought, a climatic reality throughout much of Africa, will be severely affected by altered hydrological cycles, development experts at the World Bank have declared Africa ‘under-dammed’. The World Bank’s energy specialist in recent years, Reynold Duncan, urged Africa to consider ‘riskier’ assets such as hydropower, stating that just five percent of the continent’s hydropower has been explored.

‘In Zambia, we have the potential of 6000 MW, in Angola, 6000 MW, and about 12,000 MW in Mozambique – we have a lot of MW down here before we even go up to the Congo,’ he said. The DRC’s Grand Inga, the world’s largest proposed hydropower scheme, is estimated to possess 40,000 MW – enough to power the continent. Its potential as a CDM project should be resisted on various eco-social grounds (see BOX 4). The West Nile CDM is a good example of the kinds of supposed renewable energy hydropower projects that are destructive in multiple ways.

This move, promoting mega-dams as development, is backed by development and commercial banks, foreign governments, African initiatives such as the New Partnership for African Development (NEPAD), presently motivating for 13 dam projects, as well as ‘resource-hungry’  large countries such as China.

 

Though Africa already has more than 1270 dams, the benefits have yet to positively impact on the majority. Mozambique, lauded as a success model, generates enough electricity to power the country, but less than 9 percent of Mozambicans have access to electricity. The bulk of the country’s 2000 MW, is exported to neighbouring regions and utilities such as South Africa’s parastatal Eskom – via cost-intensive, high voltage transmission lines that account for as much as 50 percent of the total construction costs. The remainder is utilised by domestic-based corporations such as aluminum smelter Mozal, operated for exports by BHP Billiton, one of the largest mining concerns in the world.

‘Most often, large dams provide electricity for foreign-owned industries, water for foreign mining companies, and irrigation for large-scale farms,’ said Pottinger. ‘Distribution lines are the most needed but least cost-effective parts of an African grid system. Priority is given to big consumers, cities and industries, over poor households, and low density or rural areas.’ Long-range, high voltage transmission lines are meant to connect two end points, requiring costly substations to reduce the voltage and distribute along the way. But these lines end up passing over thousands of villages.

The destruction caused by mega-dams appears to be receiving new financing lifelines in the form of CDMs, through massive subsidies offered to hydropower developers[1], claims International Rivers. In 2007, over 650 hydro-projects had received or applied to receive carbon credits from CDM mechanisms, and if approved, would facilitate a windfall for developers, amounting to over $1 billion annually. According to their report titled Failed Mechanism: How the CDM is subsidizing hydro developers and harming the Kyoto Protocol, ‘The CDM is blindly subsidizing the destruction of rivers, while the dams it supports are helping destroy the environmental integrity of the CDM.’ More than one third of the hydro projects approved for credits by the CDM’s Executive Board were completed prior to CDM approval; 89 percent were projected to be completed within a year and over 95 percent, within two years  – especially telling of the mentality underpinning hydro-projects, given that construction is usually multi-year (between 4-10 years).

For each CDM credit sold from a ‘non-additional’ source, one extra ton of CO2 is released into the atmosphere. Seen in this light, the hydropower projects in the pipeline currently requesting over 60 million credits annually, constitute a tremendous ‘greenwashing’ of environmentally lethal projects. ‘Money that should be supporting decarbonization in developing countries is flowing into the coffers of hydropower developers with the only effect on carbon emission levels being to increase them,’ said Barbara Haya of IR. ‘Hydro developers are repeatedly justifying their applications to the CDM with surreal arguments, such as that projects that are already completed will only be completed if they receive CDM revenue. Even worse is that the companies supposed to audit the developers’ claims and the CDM’s Executive Board seem prepared to endorse such Alice in Wonderland arguments.’

Fig 7.1 Congo River basin

 

 

 

Fig 7.2 Congo River proposed Inga Hydropower Project

BOX 4: Grand Inga, grand illusions   By Terri Hathaway, World Rivers Review, 20, 2, p. 6-7   Grandiose plans are being made to develop the world’s largest hydropower project in one of the most politically volatile and corruption– plagued areas of Africa. In 2009, Reuel Khoza, the chairman of South Africa– based electricity provider Eskom, announced plans to develop the massive Grand Inga hydropower project in the Democratic Republic of Congo (DRC) ‘Hydroelectricity from the Congo could generate more than 40,000 megawatts, enough to power Africa’s industrialization with the possibility of selling the surplus to southern Europe…’ Inga’s centralized grid system is likely to do little to ‘light up’ Africa for the 90 percent of people now living without electricity, most of who live in rural areas outside the reach of power grids. Grid expansion is quite costly, and trying to reach scattered rural communities would significantly increase project costs as well as the cost of electricity. Long transmission and distribution lines also increase electricity losses (older systems can lose up to 30 percent through transmission and distribution losses). Based on historical trends, the trickle–down effects in the form of jobs and taxes will likely be minimal for Africa’s poorest, while also increasing unsustainable national debt loads. Potential direct impacts to locally affected peoples are unknown at this time, but remain of concern. While run–of–river projects can have less damaging consequences than storage dams, they are often far from environmentally benign. The term ‘run–of–river’ is undefined, and is often therefore used to ‘greenwash’ projects. In fact, many run–of–river dams have large dam walls, major social and environmental impacts, and even reservoirs. The extent of barriers and diversion canals involved in this colossal project is still unclear, but the cumulative impacts of Grand Inga’s 52 turbine installations, as well as Inga 3, on the river’s flow could be considerable. Impacts to fisheries, riverine forests and river ecology will need careful study. As more studies of GHG emissions from hydropower are conducted, scientists are finding increasing evidence that emissions from dams, especially methane, are a legitimate concern, particularly in tropical areas. The Inga projects will also need careful, independent study of their emissions impacts. Project proponents have indicated they hope to gain a revenue stream for Inga 3 from the Clean Development Mechanism (CDM). Projects like Inga 3 turn the CDM into a subsidy mechanism for hydro developers and a carbon accounting loophole for industrialized countries, instead of a tool for climate protection. CDM credits for Inga 3 would also be a double blow to renewable energy in Africa. First, project investment attracted by CDM credits would divert potential investment from renewable energy such as wind, solar, and geothermal to large hydro. Second, revenue from CDM credits would divert additional CDM investment from truly sustainable projects, effectively crowding out funds for new renewables in Africa. Development of Inga could also reduce the planet’s ability to absorb carbon emissions which cause global warming. The Congo river is an important planetary source of nutrient flows into the ocean, which feeds microscopic organisms that consume carbon, then die and sink to the bottom of the ocean. A 2009 study on the Grand Inga Complex says that ‘plans to divert, store or otherwise intervene in Lower Congo River dynamics are truly alarming’ and ‘ignore the river’s significant influence on the equatorial Atlantic, which, in turn, is central to many climate change models.’ Despite its potentially huge impact on this carbon drawdown cycle, Grand Inga’s proponents hope to garner carbon credits to offset some of its huge price tag. Political instability is a very real concern across the region where the transmission grid would be built. The ongoing violence in DRC was recently rated the world’s most forgotten crisis by Reuters. Over three million people have died since 1998 as a result of the civil war and ongoing strife in DRC. The Inga mega– project would centralize much of Africa’s electricity source and require a grid of transmission lines through many of Africa’s most politically unstable regions. Dams, power plants, and transmission lines are often made targets in political conflicts. The dependence of more countries’ economies on Inga would increase its attractiveness as a target for sabotage by rebel groups. In 1998, rebels seized Inga II and cut its power to Kinshasa, the capital of DRC.

 

 

Gibe III in Ethiopia

 

A mega-dam, affecting over 500 000 people, is to be financed in Ethiopia, extending to nations such as Kenya: Gilgel Gibe III. But the dam, whose height will reach 240m, with a 151 km reservoir, and with a storage capacity of 11.75 billion m3, is marked by clumsy corruption and irregularities. In 2004, several weeks after the Ethiopian Electric Power Corporation (EEPCo) granted a no-bid contract to Italian firm Salini Costruttori for the construction of Gibe II, Italy cancelled €367 million in bilateral debt, followed by a loan from the Italian Development Corporation (IDC). Italy’s Ministry of Finance was still under investigation for €220 million in loans provided by the IDC for Gibe II when construction of Gibe III began in July 2006.

This was before the Environmental Protection Authority received the Environmental Impact Assessment (EIA) – a report that would be completed only in 2009. Thus far, three monster-contracts have been granted to Salini through a no-bid process, and as of late 2009, the Italian government was still considering financing Gibe III to the tune of €250m. Gibe III’s contract, currenty pegged at $2.1 billion – an increase of 11 percent from original estimates, violated Ethiopia’s procurement policies for public works as well as that of the World Bank and African Development Bank. In 2008, when Gibe was granted the ‘license to kill’, the criminal case against the IDC was closed with no conclusive results.

Gibe III is estimated to generate 1,870 MW, with about 50 percent (900 MW) proposed for export to Djibouti, Sudan and Kenya. This will be a major component of Ethiopia’s 25-year national energy master plan, with Gibe III earning a projected €300 million annually in profits from exported energy. Investment in cost-intensive transmission lines required to ‘export’ energy to Kenya, Sudan and Djibouti have yet to be secured. The cost for Kenya alone is $800 million, as per the terms of the 2006 Memorandum of Agreement signed between Kenya and Ethiopia for the purchase of 500 MW. But given the recurrence of drought in Ethiopia – plaguing the country for months at a time, at a cost of $200 million a stretch, the project is characterised by energy insecurity. Meanwhile, within Ethiopia, less than 11 percent of Ethiopians have access to electricity.

‘The plan excludes from its investment requirements those costs related to ‘distribution, rural electrification and network reinforcement resulting from demand growth,’ said a report by NGO International Rivers (2008). In 2008, eight hydropower dams accounted for 85-89 percent of Ethiopia’s electricity, with five more dams, including Gibe III, currently under construction, estimated to generate a combined capacity of 3,125 MW. EEPCo currently generates about 1000 MW from six dam projects, with hydropower contributing 89 percent to Ethiopia’s electricity production.

China – via the Industrial and Commercial Bank of China (ICBC) – has stepped in to provide a $500 million loan to finance the requirements of Dongfang Electric Machinery Corp, supplying machinery for the project. Goldman Sachs, American Express and Germany’s Commerz Bank have cumulatively invested $3.7 billion in ICBC; Sachs holds the largest share at 5.75 percent or $2.6 billion, injected just prior to ICBC going public on the Hong Kong Stock Exchange.

In recent years, China’s Sinyhydro has captured 50 percent of the world’s hydropower market, chiefly through the barter system ie: ‘resources-for infrastructure’,. In this way, China’s funds are returned to sender through tenders allocated to ‘home’ countries, while exploiting the resources of host countries. And as infrastructure is almost selectively geared to facilitate easier exploitation of resources – as a substitute for resource revenues remitted to host governments, China essentially liquidates African resources at a huge bargain. It is also worth noting that over 3000 of dams constructed by Chinese companies within China have collapsed due to substandard materials, hasty construction, grossly unsuitable geographic locations, amongst other fatal flaws – leaving aside socio-ecological impact on ecosystems, displaced – resettled peoples, host communities and downstream populations.

China itself does not subscribe to international environmental frameworks and China subscribes only to the environmental framework of host countries. Ethiopia, experiencing gross deforestation under the rule of lifetime dictator Meles Zenawi, is unlikely to care about the dam’s impacts so long as it brings in the cash that Ethiopia’s rent-seeking state – 90 percent dependent on strategic aid (foreign aid) – seeks to attract.

But though China remains the primary driver behind the construction of mega-dams in Africa – a move since backed by the World Bank under Robert Zoellick’s leadership, there are other, more ‘respectable’ actors involved.

According to Salini’s spokesmen, criticisms leveled against the project ‘have already been assessed and denied by authoritative international organizations, such as EIB and the African Development Bank (ADB). The European Investment Bank, having partially financed Gibe I and II, as well as the African Development Bank, considered investment at €250 million.

The efforts of civil society movements, particularly the IR network, as well as Friends of Lake Turkana (FoLT) and others resulted in the EIB financing the EU-Africa Infrastructure Trust Fund, which has earmarked € 1.2 million for two extensive studies investigating the dam’s impact on Lake Turkana as well as Ethiopia’s Omo River.

Why does this matter? Gibewill affect three regions (including the flammable Ilemi Triangle, located at the juncture where Southwestern Ethiopia, Southeastern Sudan and Northwestern Kenya cross geographies), an area characterized by conflict rooted in food and water insecurity. A 60 percent reduction in river flow means that impacted populations include not only the displaced – the EIA deliberately underestimated the number of people to be displaced in order to fast-track the project — but also those located downstream, usually marginalized to the periphery of ‘cost benefit analysis’.

Affected peoples include: 100, 000 peoples located in Ethiopia’s Lower Omo Valley, engaged in flood-recession agriculture as well as further 100 000 peoples dependent on grazing livestock or trading with farmers dependent on flood-recession agriculture; 500, 000 rural peoples inhabiting Ethiopia’s South Omo zone. and 300, 000 peoples sustained by Kenya’s Lake Turkana fisheries. Increased salinity would additionally impact the quality of potable water for humans and livestock.

Over 200,000 agro-pastoralists and pastoralists directly dependent on flood-recession agriculture in the lower Omo basin will immediately face severe impoverishment, leading to conflict, famine, disease, as well as the artificial creation of almost a quarter million ‘environmental’ refugees. This compounds the already strained heavily-armed status of marginalised and disenfranchised ethnic groups in regions like Southern Sudan, set to be devastated by the dam.

Damming the Omo River will drastically reduce inflow to Turkana as the former supplies 90 percent of input with an estimated 10-12 meter drop. Scientists state that a 5 meter drop would result in the elimination of flooding in the Omo Delta, located mostly within Kenya. Filling Gibe III’s massive reservoir will further reduce 50 percent of the flow to Turkana, while fractures due to cracks in underlying rock formations, revealed IR, would siphon 50-75 percent of dammed reservoir water. The Omo River, flowing 500km south from the dam’s proposed site, feeds the Omo National Park, an area of critical biodiversity, populated by 15 different ethnic groups, all sustained by the river.

According to the Africa Resources Working Group (ARWG), comprised of US, European and African academics and other scholars specializing in large hydro-dam and river basin development initiatives, ‘The quantitative [and qualitative] data included in virtually all major sections of the report were clearly selected for their consistence with the predetermined objective of validating the completion of the Gibe 3 hydro-dam.”

The proposed rain-fed cultivation as well as planned flood simulation established in the EIA deliberately mischaracterizes the reality of the region’s climate, as well as the history of mega-dams in Africa, noted for ineffective and corrupt management and maintenance (the pattern already evidenced in the Gibe posse). As Professor Thayer Scudder, one of twelve commissioners at the World Dam Commission, and one of the World Bank’s former principal resettlement officers said, ‘planned flooding is rarely, if ever, successfully implemented in Africa.’ This summary excludes the impact of seismic activity due to the immense weight of the reservoir catalyzing the risk of seismic activity – a reality deliberately discounted from the EIA.

One of semi-arid Africa’s largest rivers, Omo (and Lake Turkana) sustains a correspondingly large population, because – despite Gibe I and II, it remains a resource held ‘in common; that is managed by farmers, herders and traders, utilizing centuries of region-specific knowledge and practices.’ On the issue of utilization of the ‘commons’, Nobel laureate Prof Elinor Ostrom has claimed that,‘The myth that I have tackled is that the users of common-pool resources would always be helplessly trapped in overuse,” said Ostrom. The means of stable organization of common-pool resources, is primarily composed of eight design principles: clearly defined boundaries; collective-choice arrangements; congruence between appropriation and provision rules and local conditions; monitoring; graduated sanctions; conflict resolution mechanisms; minimal recognition of rights to organize; and finally, where common-pool resources ‘are part of larger socio-ecological systems’, nested enterprises.

“Markets and states are hardly the full set of relevant institutions for people in contemporary society. GDP is an important indicator, but it is not the only measure of economic activity that we should be thinking about. GDP gives us no understanding of the successful efforts to sustain resources. We need to be thinking about how small cities can organize, how local communities can organize, and how regions such as the areas along the Nile crossing country lines need to find ways of organizing,” said Ostrom.

But the opacity web comprising the Gibe initiative has little to do with community organization given that the community itself presents the greatest threat to the project – designed to export-orient Ethiopia’s ecosystems in order to cash in ‘resource revenue’.

In this sense, the dam – against the backdrop of Ethiopia’s national energy ‘master-plan’ has been packaged as just another lucrative commodity negotiated via a ‘secretive development agreement’ – as evidenced in the fabrication and obfuscation informing the ‘public consultation process’ as well as the new law designed to restrict and limit the activities of civil society.

An estimated 90 percent of the $7 billion in electricity investment will be derived from loans – a considerable portion earmarked for export, rather than the poverty reduction initiatives that should constitute loan demands.

Ironically, in a 2006 report, EEPco itself outlined wind as a sustainable consistent source of energy for nine months of the year, as opposed to water tables, peaking after June. EEPco revealed that hydro-dependency presented a tremendous obstacle to energy generation consistency in light of drought (such as occurred in 2008, from May to September during peak water tables), resulting in decreasing reservoir levels, and thus recommending diversification. By marginalizing the cheap job-intensive sustainable source of wind energy, Ethiopia’s ‘rentier’ government has collateralized the country’s future, setting in motion an ‘eco-genocide’ that will initiate brutal famine and Africa’s worst water-war yet.

 

Conclusion

 

International Rivers, a hydric justice group, reports that by 30 January 2012, 2125 hydro projects with an installed capacity of 94,825 MW had applied for carbon credits, more than two-thirds of them in China. Yet, the group also cautions: ‘A European Union law called the Linking Directive regulates the use of CDM credits within the EU’s internal carbon trading system. The directive states that large hydro credits entering the European Trading System must comply with the criteria and guidelines of the World Commission on Dams (WCD). To date, none of the large hydros in the CDM pipeline have proven WCD compliance.’  However, Europe is marginal to such decisions.

 

The idea of making major dams central to a supposed renewable energy strategy (even gaining carbon credits) for Africa is dubious for all the reasons spelled out above. Yet this idea predominates and, with the growing climate crisis, has been given additional emphasis in multilateral agencies in recent years. The dam building industry, despite all the criticisms spelled out in the official report of the World Commission on Dams of 2000, continues its march unabated.

 

To combat this problem, the most important dilemma for African policy-makers and environmental (hydric) justice organisations, is how to avoid the push of finance into mega-dams. The strategies so far have involved advocacy against multilateral financing, e.g. the World Bank in Ethiopia. However, the African Development Bank and Chinese investors have far fewer qualms about investing in destructive infrastructure.

For those courageous civil society activists in various mega-dam sites in recent years – the Lesotho Highlands Water Project, the Bujagali Dam in Uganda, the Mpande Nkuwa projects in Mozambique, the Himba people fighting a dam on the Namibia-Angola Kunene River, and DRC, Ethiopian/Kenyan critics of the dams considered in this chapter – there is now ever greater evidence from CDM applications of the urgency of winning these battles.

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[1]. International Rivers (2007), ‘Failed Mechanism: Hundreds of Hydros Expose Serious Flaws in the CDM’ Press Release <http://www.internationalrivers.org/node/2326&gt;