ECA Watch: Large Dams

Did You Know?

Most large dams in poor countries would never get off the ground without the support of ECAs. Generally, ECAs lack sufficient environmental and social policies and do not adhere to internationally accepted standards and guidelines surrounding dam development. This has allowed ECAs to finance dam projects that Multilateral Development Banks refuse to fund due to unacceptable social, environmental and economic impacts. ECAs operate under no common environmental standards and in almost complete secrecy. This allows certain ECAs to profit by financing destructive dam projects that other ECAs refuse to get involved in. The lack of coordination among ECAs has resulted in an environmental and social race to the bottom. Examples of ECA financing of controversial large dams includes the Atatuerk and proposed Ilisu Dams (Turkey), the Bujagali Dam (Uganda), and the notorious Three Gorges Dam (China).

"An estimated 40–80 million people have been forcibly evicted from their lands to make way for dams. Evidence shows that these people have often been left economically, culturally and psychologically devastated..."

-International Rivers Network, in 1998 World Bank and IUCN report World Commission on Dams

International Day of Protest Baguio City, Philippines. Source: International Rivers Network, Photo credit: F. Toots S., Philipine Daily Inquirer (March 14, 1999).

* Important Background Documents on Large Dams
* The OECD's Promotion of Big Hydro as Renewable Energy
* Ilisu Dam Project Summary
* Bujagali Dam Project Summary
* Three Gorges Dam Project Summary
* San Roque Dam Project Summary
* News Items 2004-2005
* News Items 2002-2003

Important Background Documents on Large Dam Projects

A Trojan Horse for Large Dams [PDF] or HTML Version - Sept 2, 2005 by ECA Watch; report on social and environmental impacts of recent hydropower projects financed by ECAs.

World Bank Standards Aren't Good Enough [PDF] - August 2005 by The Cornerhouse, UK; report on the new subsidies negotiated for hydropower projects at the OECD.

Race to the Bottom II [PDF] - Sept. 2003 by ECA Watch; containing various case studies on ECA projects, including large dams.

The Use of Environmental and Social Criteria in Export Credit Agencies' Practices [PDF] - 2003 by GTZ and Ecologic; a report analyzing the response of ECAs to the World Commission on Dams.

Damming Evidence- Canada and the WCD [PDF] - June 2003 by the Halifax Initiative; a report about EDC and large dams.

China Exim Bank and China Development Bank Case Studies [PDF] - July 2004 by International Rivers Network; a briefing paper about dams funded by Chexim and CDB.

Dams and Cultural Heritage Management [PDF] August 2000 by Steven A. Brandt (University of Florida) - a working paper prepared for the World Commission on Dams.

The OECD's Promotion of Big Hydro as Renewable Energy:

The Export Credit Working Group of the OECD, or the Organization for Economic Cooperation and Development, has facilitated negotiations to include hydropower under an arrangement for subsidies for renewable energy projects (approved in April 2005). This arrangement for new financing incentives for renewable energy projects includes trojan horses such as the eligibility of large dams, which generate massive and irreversible social and environmental damages, and incentives for private investment in water projects, investment which has a history of failing to ensure the supply of clean and affordable water. Including subsidies for large dams and water privatization detracts from genuine efforts to create a level playing field between renewable energy projects and nuclear and fossil fuel projects.

Read more at the ECA Watch Page on the OECD

Ilisu Dam Project Summary:

The Ilisu dam is a hydro-electric power plant to be built on the Tigris River, part of the Southeastern Anatolia Project (Turkish initials "GAP") to build 22 dams and 19 power plants on the Tigris, the Euphrates, and their tributaries. The dam will directly affect 78,000 people by removing them from their homes, and indirectly affect the many people who will have to deal with incoming immigration of the displaced people. Included in the towns to be affected by a flooded Tigris is the ancient city of Hanskeyf, leading to the loss of important archeological artifacts. The Ilisu dam is projected to reduce water flow in the Tigris and a fact finding mission reported in 2002 that it is possible that with full implementation of the Ilisu/Cizre projects, during drought periods all the summer flow could be diverted before it crossed the border into Iraq.

Read more at the ECA Watch Ilisu Dam Project Page and 2003-2008 news

Three Gorges Dam Project Summary:

Known to many environmentalists as "the Mother of All Dams," the Three Gorges Dam is the world's largest hydroelectric project, the largest public works project since the Great Wall, and the world's most environmentally and socially destructive infrastructure project. Still under construction, it will be 600 feet (abt. 185 m) high, create a 1-mile (abt. 2 km) wide, 400-mile (abt. 600 km) long reservoir on the Yangtze, the world's third-longest river, inundating hundreds of villages and displacing almost 2 million people by the time it’s completed in 2009.

Read more at the ECA Watch Three Gorges Dam Project Page

Bujagali Dam Project Summary:

One of the largest projects with ECA involvement in Uganda is the Bujagali Hydropower Project, a dam whose site is 2.5 km below one of the world’s most magnificent waterfalls, some 10 km from the source of the River Nile. The project stands to increase Uganda’s debt burden, adversely affect the lives of thousands of displaced people and cause serious environmental damage.

Read more at the ECA Watch Bujagali Dam Project Page

San Roque Dam Project Summary:

Development of the San Roque dam comes primarily from Japan's ECA Japan Bank for International Cooperation (JBIC), who agreed to loan the project USD $302M to $400M in support. Construction of the dam necessitates the displacement of the indigenous Ibaloi people, whose consent on the project should have been required under the Indigenous Peoples’ Rights Act. The dam will prevent people from farming and subsistence gold mining by removing them to areas where those activities are impossible. It will also decrease the quality of the water by creating a large amount of sedimentation.

Read more at the International Rivers Network's San Roque Dam Page

News 2008-2009

Ilisu construction restarted without permission Nov/09

German, Swiss and Austrian ECAs confirm cancellation of Ilisu credits Jul/09

Xinjiang riots damage Sino-Turkish ties, including possible Ilisu involvement Jul/09

European Governments Pull ECA Financing for Turkey's Ilisu Dam Jun/09

Concerns mount over Ilisu dam impacts May/09

Ilisu dam site nominated for UNESCO heritage status Apr/09

Export credit agencies force Ilisu suspension Jan/09

NGOs welcome decision by Germany, Austria and Switzerland to suspend contracts Dec/08

Turkey continues Ilisu dam construction despite reports ECA conditions not met Nov/08

ECAs begin withdrawal from controversial Ilisu dam financing Oct/08

Ilisu: A Test Case for the Global Dam Industry Sep/08

Continuing controversy over Turkey's Ilisu Dam Jul/08

ECAs meet in Vienna to overcome Turkish inability to meet Ilisu conditions May/08

lisu controversy exposed by Experts and Financial Times Mar/08

New Ilisu Campaign Website Feb/08

News 2006-2007

Nationwide Protests against German Investment in Turkey's Ilisu Dam Nov07

Arbitrary expropriation begins at contested Ilisu dam site Oct07

Yusufeli: Is Turkey blackmailing ECAs over lowered Ilisu standards? Oct/07

Turkey flouts ECA conditions, highlighting weaknesses of OECD Common Approaches Sep/07

NGOs condemn signing of the contracts for the Turkish Ilisu Dam Aug/07

Export credits for Turkey's Ilisu dam generate official & citizen protests May/07

The Ilisu Dam: Downstream water impacts on Iraq are adverse and serious Mar/07

Germany and Austria approve Ilisu dam export credit guarantees in stunning hypocritical move Mar/07

German, Austrian and Swiss ECAs refuse to release Ilisu conditions Jan/07

Switzerland & Germany agree to guarantees for controversial Ilisu Dam project Dec/06

Ilisu Dam update Oct/06

Three European ECAs set to support Ilisu dam despite obvious failure to meet standards Sep/06

International experts intensify critique of Ilisu dam while regional resistance grows Mar/06

Ilisu Dam EIA released - NGOs show new design to be seriously flawed Feb/06

News 2004-2005

OPIC to Cover USD $212M for Colombian Hydropower Plant Upgrades September 12, 2005 (Source: USAID via Reliefweb)

Economists Question Development Benefits of Large Dams in India [PDF] July 2005 (a paper by Rohini Pande, Yale, and Esther Duflo, MIT) — "[I]n a district where a dam is built,
agricultural production does not increase but poverty does."

Movement of Dam-affected People (MAB) Protests Against Lack of Compensation May 2005 (Source: Bank Information Center)— On the afternoon of the 31st of May, more than 300 people affected by the Caña Brava Hydroelectric project occupied the Inter American Development Bank’s Brazilian headquarters.

Sudan: Update on the Merowe/ Hamadab Dam Project July 6, 2005 (Source: IRN) — The International Rivers Network and Cornerhouse summarize the responses to their report on the Merowe Dam Project in Sudan. The Merowe/ Hamadab dam is the largest hydropower project being developed in Africa.

NGOs mobilize to stop Ilisu Dam (Again!) June 2005 (Source: Friends of the Earth, UK) — Friends of the Earth UK has again mounted a letter-writing campaign to stop the Ilisu Dam in Turkey.

US ExIm Backs Environmental Exports: Plans to Refit Dams May 16, 2005

French Representative Challenged on Nam Theun 2 May 4, 2005 (Source: ECA Watch) Amis de la Terre France, Proyecto Gato, and 56 other NGOs from 34 countries have asked the OECD to investigate non-compliance with OECD rules by the National Contact Point (NCP) of France which handled the complaint about Laos' hydropower project Nam Theun 2 by NGOs against Electricité de France.

NGOs - Effective Because of Public Trust March 2005 (Source: International Rivers Network, The International Journal of Hydropower and Dams)

Arundhati Roy Protests India’s Destructive ECA-backed Dams July 19, 2004 (Online News)— In this opinion piece written for Outlook India, Roy draws attention to Harsud, a 700-year-old Indian town slated to be submerged by the reservoir of the Narmada Sagar Dam, the most destructive dam on that river.

Complaint Filed with Tractebel Electricity and Gas International over Violations of OECD Guidelines on its Laotian Houay Ho Dam Project April 15, 2004 (Source: Proyecto Gato) )— The Belgian NGO, Proyecto Gato, has filed a complaint alleging violations of the OECD Guidelines for Multinational Enterprises with respect to the Houay Ho dam reservoir in Laos.

News 2002-2003:

Beyond Three Gorges January 20, 2003 (Sorce: China Daily) China Three Gorges Project Corp (CTGPC), a flagship State-owned company in charge of development and running of the ongoing Three-Gorges Project, is to launch a number of important reforms during 2003, aimed at building it into a gigantic business entity. A power generation-based, diversified business group, it will penetrate into a number of sectors, including power supply, construction engineering and consulting, property management, finance and other areas of the service sector.

Turkey Dam Fight to Continue January 9, 2002 by Joe Grossman.