[Date Prev][Date Next][Thread Prev][Thread Next][Date Index][Thread Index]
DAM-L Japan withholds funding for Sondu-Miriu/LS (fwd)
----- Forwarded message from Lori Pottinger -----
X-UIDL: iiZ"!bcQ!!9^G!!kO4!!
Return-path: <owner-irn-safrica@netvista.net>
Received: from DaVinci.NetVista.net (mjdomo@mail.netvista.net [206.170.46.10])
by lox.sandelman.ottawa.on.ca (8.8.7/8.8.8) with ESMTP id NAA04778
for <dianne@sandelman.ottawa.on.ca>; Fri, 11 May 2001 13:19:44 -0400 (EDT)
Received: [(from mjdomo@localhost)
by DaVinci.NetVista.net (8.10.0/8.8.8) id f4BHGbS09395
for irn-safrica-list; Fri, 11 May 2001 10:16:37 -0700 (PDT)
(envelope-from owner-irn-safrica@netvista.net)]
Received: [from [192.168.1.99] ([205.178.127.217])
by DaVinci.NetVista.net (8.10.0/8.8.8) with ESMTP id f4BHGWe09385
for <irn-safrica@netvista.net>; Fri, 11 May 2001 10:16:32 -0700 (PDT)
(envelope-from lori@irn.org)]
X-Sender: lori@pop3.netvista.net
Message-ID: <p05010410b721ce5ed9c0@[192.168.1.99]>
Date: Fri, 11 May 2001 10:14:20 -0700
To: irn-safrica@netvista.net
From: Lori Pottinger <lori@irn.org>
Subject: Japan withholds funding for Sondu-Miriu/LS
X-MIME-Autoconverted: from quoted-printable to 8bit by DaVinci.NetVista.net id f4BHGXe09388
Sender: owner-irn-safrica@netvista.net
Precedence: bulk
[ Charset ISO-8859-1 unsupported, converting... ]
10/05/01 KENYA
Sondu-Miriu HEP runs aground again
Work on the Sondu-Miriu hydro-electricity generation project (HEP) in
Kenya could be suspended, after funding due to be released for the
project by the Japanese Bank for International Cooperation (JBIC) was
withheld. The JBIC is the HEP?s main backer, meeting 80% of the 6
billion Shilling (US$76.5 million) project to build a 60 MW power
station. The HEP will divert water from the Sondu-Miriu River into a
regulating pond with a capacity of 1.1 million cubic metres, from
where it will be led via a 7.2 kilometre tunnel into the main power
house. State-owned Kenya Generating Company (KENGEN) is managing and
partly funding the project. JBIC has already provided some 60% of the
total funding due, and if the additional loan is not made available
by June, the HEP?s contractor, Japan?s Nippon Koei Co Ltd has said it
will suspend construction work. The project is already behind
schedule, its completion date having been pushed back from mid-2003
to the first quarter of 2004.
The HEP was first proposed in 1985, but hit a hurdle before being
revived in 1997. In that year, JBIC allocated Yen 6.933 million
(US$56.7 million) to Kenya, via the Japanese bank?s Overseas Economic
Cooperation Fund, for the project. The loan is for civil works (being
carried out by Konoike Construction JV with Viedekke Heavy
Construction Company (Norway) and Murray and Roberts Contractors
International of South Africa) and consulting services.
70% of Kenya?s total electricity output is currently from
hydro-electricity, but that is not enough to meet demand, and power
cuts are frequent. Kenya is the largest African recipient of Japanese
Official Development Assistance.
One official reason given for the delay in disbursement of the second
loan tranche is ?ongoing changes in the Japanese government.? A more
likely reason is JBIC unease over the way KENGEN has been handling
the HEP, notably with respect to the local community. Several NGOs as
well as politicians in the Nyanza region, about 400 kms from the
capital of Nairobi, have lodged complaints against KENGEN, varying
from inadequate environment assessment for the HEP, to an about-face
on electricity and irrigation facilities promised in the original
project documents, to displacement of populations. Another serious
incident, in which a journalist protesting against the Sondu-Miriu
project was shot and tortured by ?police and Kengen guards? in
January 2001 resulted in the Japanese government sending a letter to
Nairobi, voicing concern about journalist Argwings Odera?s, safety.
Odera had earlier written to the Japanese government to highlight
objections to the HEP, and when he was arrested in January, that
letter was cited in one of the charges brought against him. Odera?s
arrest and alleged torture coincided with a visit to Kenya by then
Japanese Prime Minister Yoshiro Mori. The second tranche of the loan
was withheld shortly thereafter.
AFRICA ENERGY INTELLIGENCE N? 13
05/04/01 KENYA
World Bank cuts off aid to Kenya Power Co.
The World Bank has cut off a credit line for US$50 million to the
Kenya Power and Lighting Company?s (KPLC) Emergency Power Supply
Project. In a letter sent to Kenya?s finance minister Chrysanthus
Okemo, the Bank?s vice-president for Africa Region Callisto Madavo
said the decision to suspend funding was taken because KPLC had not
implemented a restructuring programme agreed with the Bank last
November, and which included the sacking of 2,000 KPLC staff by June
2001. The World Bank now gives Kenya?s government two months to meet
a set of conditions before funding is resumed. These are: proof that
satisfactory progress has been made in restructuring; naming a
consultancy to carry out a financial management study; and issuing a
request for proposals for restructuring the power sector and for the
privatisation study. If these conditions are not met by May 31, the
project will be cancelled. Madavo defined ?satisfactory progress? as
being the reduction of the number of divisions and managers at
corporate headquarters from 15 to 7, as recommended by
PriceWaterhouseCoopers in 1999. Another precondition of unlocking the
frozen funds is that a list of the 600 initial workers to be made
redundant be issued and costs related to such redundancies be
established.
The World Bank decision will put the Kenya Electricity Generating
Company (KenGen) ? Kenya?s national electricity board ? in a
difficult situation, too. KenGen was counting on a 19 billion
Shillings (US$245 million) loan from bilateral donors to develop the
Oikaria II geothermal plant and the Sondu Miriu II dam, expected to
be completed in 2002 and 2003 respectively. KenGen was recently
reprimanded by a parliamentary committee for having allowed the KPLC
to build up excessive debts with it.
The Kenyan government failed to meet deadlines set by the World Bank
for naming management, financial and power consultants. With these
and other terms of the agreement breached, the Bank considered that
implementation of the Emergency Power Supply Project would only have
?provided short-term relief? to Kenya?s beleaguered power sector,
rather than ?addressing the management failures that contributed to
the serious power shortages experienced by Kenya last year.? The
Project , which was approved between the World Bank and the
government of Kenya on October 26, 2000, was to ??finance the
Government's purchases of electricity and associated fuel from
short-term independent power producers, and fuel suppliers while the
power supply crisis lasts.? Among the benefits to be derived from it
were the avoidance of ?severe economic contraction, and (the
provision of) fast-track reforms in power transmission and
distribution systems to create a more competitive and private
sector-led system...?
AFRICA ENERGY INTELLIGENCE N? 11
W
Ryan Hoover
Africa Campaigns
1847 Berkeley Way
Berkeley, CA 94703
USA
Phone: (510) 848-1155 Fax: (510) 848-1008
www.irn.org
--
::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::
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
::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::
-------------------------------------------------------------------------------------
To unsubscribe from this list, send a message to majordomo@netvista.net
with no subject and the following text in the body of the message
"unsubscribe irn-safrica".
----- End of forwarded message from Lori Pottinger -----