JPMorgan Chase urged to reject loan for Ethiopian dam
Environmental Finance, UK - January 25, 2008

JPMorgan Chase has come under pressure to refuse to provide a loan for the controversial Gilgel Gibe III hydropower dam in Ethiopia.

Three NGOs – Campagna per la Riforma della Banca Mondiale in Italy, Les Amis de la Terre in France and International Rivers in the US – have written to the US bank to urge it to refuse a $400 million commercial loan request from the Ethiopian government in connection with the project, which they say would violate the bank’s environmental policy.

The 1,870MW dam is already under construction by Italian firm Salini, at an estimated cost of €1.4 billion ($2.1 billion), and would be the third stage in a project to dam the Gilgel Gibe River for hydropower. The Italian export credit agency SACE has refused to guarantee the project.

In November last year, the NGOs carried out a fact-finding mission to investigate the proposals, which they say uncovered evidence of environmental, social and legal issues with the dam. Problems raised by the NGOs include:

Environmental Impact Assessment (EIA): The NGOs state that the EIA – released by SACE – “is wholly inadequate according to international best practice”. In particular, they criticise the EIA for failing to assess the downstream impacts of the dam on the Omo River which will be diverted as part of the project. Although the dam is 13% complete, the project has yet to receive a permit from the country’s environmental protection authority, as required under Ethiopian law, the NGOs say ...