Economics

The Madeira River Project consists of two huge hydroelectric dams on the Madeira, the principal tributary of the Amazon River in Brazil: Santo Antonio (installed generating capacity 3,150 MW) and Jirau (installed capacity 3,300 MW) - at a total cost of approximately US$10 billion. The financing for the project is not yet finalized, however, Brazilian as well as Spanish and Portuguese banks are interested in providing finance for the project.

The stated purpose of the study by Power Planning Associates, which was commissioned by the World Bank Group, is to evaluate the economic viability of the proposed Bujagali project in Uganda, while taking into account the economic, financial, social, and environmental aspects. International Rivers asked economist Pete Tsournos to analyze the report against a few key questions.

Report shows Executive Board approved project on basis of distorted economic analysis 

In early June, the World Bank is expected to vote on a political risk guarantee for the Bujagali dam in Uganda. The Bank approved a package of loans and guarantees for the dam in December 2001, but this has proved insufficient to secure support from other funders. Analysis of internal documents by International Rivers shows that World Bank management manipulated data to gain Board approval for the project, which is sponsored by US–based AES Corporation. Contrary to Bank management claims, official documents show that the dam is not the cheapest option for generating electricity in Uganda. International Rivers calls on the Bank to reconsider the economics of the project, to allow the World Bank Inspection Panel to submit its near–complete report on Bujagali, and to assess Uganda’s promising geothermal potential before taking any further decision on the project.