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INDEPENDENT REVIEW PANEL COMPLIANCE REVIEW REPORT ON THE BUJAGALI HYDROPOWER AND INTERCONNECTION PROJECTS June 20, 2008 1 ACKNOWLEDGEMENTS The IRM Compliance Review Panel could not have undertaken and completed this report without the generous assistance of many people in Uganda and at the African Development Bank. It wishes to express its appreciation to all of them for their cooperation and support during the compliance review of the Bujagali Hydropower and Interconnection projects. The Panel thanks the Requesters and the many individuals from civil society and the communities that it met in the Project areas and in Kampala for their assistance. It also appreciates the willingness of the representatives of the Government of Uganda and the projects’ sponsors to meet with the Panel and provide it with information during its visit to Uganda. The Panel acknowledges all the help provided by the Resident Representative of the African Development Bank in Uganda and his staff and the willing cooperation it has received from the Bank’s Management and staff in Tunis. The Panel appreciates the generous cooperation of the World Bank Inspection Panel which conducted its own review of the “UGANDA: Private Power Generation Project”. The Compliance Review Panel and the World Bank Inspection Panel coordinated their field investigations of the Bujagali projects and shared consultants and technical information during this investigation in order to enhance the efficiency and cost effectiveness of each of their investigations. While this collaboration between the Panel and the World Bank Inspection Panel worked to the mutual benefit of both parties, each Panel focused its compliance review on its own Bank’s policies and procedures and each Panel has made its own independent judgments about the compliance of its Management and staff with its Bank’s policies and procedures. Accordingly, while there may be common elements in their respective reports, the IRM Panel’s findings and recommendations in this report are based on the independent judgment of the IRM Panel and exclusively on the ADB’s policies and procedures. In addition, the Panel has benefited from the expert technical advice it received from Theodore Downing, Graham Hadley, Richard Fuggle, Peter Pearson and Carlos Tucci. The Panel expresses its special gratitude to Dr. Maartje van Putten, one of the members of the IRM Roster of Experts, for her thorough review and comments on an earlier draft of this report. Finally, the Panel expresses its gratitude to the staff of the Compliance Review and Mediation Unit: Adila Abusharaf, Amira Dhaouadi, Anasthasie Diakite, Francoise Konan and Kenia Parsons, for all their professional assistance during the preparation of this report. Although the Panel could not have completed this review without the support that all these people provided, only the Panel is responsible for the findings and conclusions expressed in this report. 2 ACCRONYM ADB African Development Bank ADF African Development Fund AESNP AES Nile Power AFD Agence Française de Développement (French Development Agency) APRAP Assessment of Past Resettlement Activities and Action Plan BEL Bujagali Energy Ltd BHP Bujagali Hydropower Project BHP-IP BHP Investment Proposal BHS Bujagali Hydropower Station BIP Bujagali Interconnection Project BIU Bujagali Implementation Unit BOOT Build-Own-Operate-Transfer BP (The World Bank) Bank Procedures CFR Central Forest Reserves CRMU Compliance Review and Mediation Unit EIA Environmental Impact Assessment EIRR Economic Internal Rate of Return EPC Engineering Procurement and Contract ERM Environmental Resources Management ESA Environmental and Social Assessments ESAPs Environmental and Social Assessment Procedures ESIA Environmental and Social Impact Assessment GOU Government of Uganda IDB Inter-American Development Bank IESIAGs Integrated Environmental and Social Impact Assessment Guidelines IFC International Finance Corporation IRM The Independent Review Mechanism IUCN International Union for Conservation of Nature IWRM Integrated Water Resources Management Policy JBIC Japan Bank for International Cooperation MDBs Multilateral Development Banks MW Megawatts NaFIRRI National Fisheries Resources Research Institute NEMA National Environmental Management Authority NFA National Forestry Authority NPV Net Present Value OM Operations Manual OP (The World Bank) Operational Policies PAPs Project Affected Peoples PPA Power Planning Associates RCDAP Resettlement and Community Development Action Plan RMCs Regional Member Countries SEA Social and Environment Assessment SIAG Strategic Impact Assessment Guidelines SSEA Strategic/Sectoral Environmental Assessment for the Nile Equatorial Lakes UA Unit of Account USD United States Dollars WB World Bank WREM Water Resources and Energy Management International Inc 3 TABLE OF CONTENTS ACKNOWLEDGEMENTS................................................................................................... 2 ACCRONYM ........................................................................................................................ 3 TABLE OF CONTENTS....................................................................................................... 4 I. EXECUTIVE SUMMARY .......................................................................................... 7 Social and Cultural Issues .......................................................................... 7 Environmental Issues................................................................................ 10 Hydrological Issues .................................................................................. 12 Economics Issues ...................................................................................... 13 Recommendations ..................................................................................... 15 II. INTRODUCTION: BUJAGALI PROJECTS BACKGROUND ............................... 17 1. The Bujagali Hydroelectric Power Project (BHP).......................................... 18 2. The Bujagali Interconnection Project (BIP).................................................... 19 3. Compliance Review Proceedings..................................................................... 20 Request and Management Response................................................................ 20 Eligibility Review............................................................................................. 20 The Compliance Review................................................................................... 21 III. SOCIAL ISSUES ...................................................................................................... 22 A. Resettlement and Compensation .......................................................................... 22 The Request and Management Response............................................................. 22 Applicable Policies .............................................................................................. 22 Discussion............................................................................................................ 24 B. Cultural and Spiritual Issues ....................................................................................... 27 The Request and Management Response............................................................. 27 Issue 1: The Basoga as Indigenous People....................................................................... 28 Applicable Policies .............................................................................................. 28 Discussion............................................................................................................ 28 Issue 2: The Cultural and Spiritual Significance of the Bujagali Falls......................... 28 Applicable Policies .............................................................................................. 28 Discussion............................................................................................................ 29 C. Grievance Mechanism ................................................................................................. 34 Request and Management Response.................................................................... 34 Applicable Policies .............................................................................................. 34 Discussion............................................................................................................ 34 D. Consultation and Disclosure .................................................................................... 35 Request and Management Response.................................................................... 35 Applicable Policies .............................................................................................. 35 Discussion............................................................................................................ 37 4 IV. ENVIRONMENTAL ISSUES................................................................................... 38 Cumulative Impacts........................................................................................................... 38 Request and Management Response.................................................................... 38 Applicable Policies .............................................................................................. 38 Discussion............................................................................................................ 39
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