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dam-l WBank Approves LHWP loan/LS



>Business Day
>05 June 1998
>
>                World Bank gives
>                green light to water
>                project loan
>
>                Simon Barber
>
>                WASHINGTON - The World Bank's executive board
>                approved a $45m loan last night for the second phase of
>                the Lesotho Highlands water project despite complaints
>                from SA civic organisations that the extra water it would
>                deliver to Gauteng could be obtained more cheaply
>                through the improved management of existing supplies.
>
>                Earlier, the European Investment Bank, the long-term
>                finance arm of the European Union, announced a $110m
>                package for the project, which is expected to cost
>                $1,1bn by the time it is completed in 2003.
>
>                The World Bank loan will pay for supervising
>                construction and ensuring that environmental and social
>                dislocations are kept to a minimum.
>
>                The bulk of the financing, $825m, will be raised in rands
>                on SA capital and money markets, and from water users.
>                The Development Bank of Southern Africa is putting up
>                $45m and Lesotho's government $25m. Another $70m
>                will be garnered through foreign commercial loans,
>                mostly backed by official export credits.
>
>                The World Bank's inspection panel - a kind of
>                ombudsman - has agreed to look at a complaint lodged
>                by anonymous members of Gauteng civic organisations
>                who fear that going ahead with the project now will lead
>                to unnecessary hikes in water rates as costs are passed
>                through to consumers.
>
>                The panel has given World Bank management until June
>                16 to present its rebuttal, and will then have three weeks
>                to draw up recommendations for the full board.
>
>                World Bank country director for SA and Lesotho
>                Pamela Cox called the project "the lowest cost
>                alternative for water supply to Gauteng province" as well
>                as being "a major source of development for Lesotho".
>
>                Josey Ballenger reports that one of the claimants said he
>                was "not surprised" by the board's decision to approve
>                the loan.
>
>                He said it was "in the nature of the World Bank to
>                approve loans that are not in the interest of communities
>                affected. But we also expect the inspection panel to go
>                ahead with (investigating) the claim because we do not
>                have to accept the (water tariff) increases that will follow
>                from the Lesotho Highlands water project."

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      Lori Pottinger, Director, Southern Africa Program,
        and Editor, World Rivers Review
           International Rivers Network
              1847 Berkeley Way, Berkeley, California 94703, USA
                  Tel. (510) 848 1155   Fax (510) 848 1008
                        http://www.irn.org
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