Clarification on the European Investment Bank's role in Ethiopia's Gibe 3 Dam

A statement issued June 4 by the European Investment Bank contradicts a June 3 announcement made to Friends of Lake Turkana that the Bank had withdrawn its consideration of the Gibe 3 Dam in Ethiopia. The June 4 statement is consistent with the Bank’s efforts to conduct its operations on Gibe 3 and other controversial projects behind smoke and mirrors.

EIB Communication on Gibe 3

On March 4, 2009, Ikal Angelei, coordinator of Kenyan community group, Friends of Lake Turkana, sent a letter to the President of the EIB urging the Bank not to fund the Gibe 3 Dam.

On April 30, the EIB’s Secretary General informed Friends of Lake Turkana that the Bank’s Complaints Office would meet with the organization, “to allow the EIB to make an informed decision concerning a possible financing or not financing of the project”. The head of the Complaints Office informed Friends of Lake Turkana that she would participate in the group’s meetings with the Compliance Review and Mediation Unit of the African Development Bank in the week of June 8 in Nairobi.

On June 3, the head of the EIB Complaints Office called Ikal Angelei and told her that the President of the EIB had formally announced that the Bank would not get involved in the Gibe 3 Project. The Complaints Office would therefore not attend the forthcoming meetings in Nairobi. A representative of another financial institution talked with Ikal Angelei on the same day and confirmed that the EIB had “pulled out” of the Gibe 3 Project.

International Rivers, the European coalition Counter Balance and Friends of Lake Turkana welcomed this announcement as “a breakthrough for affected people and the environment” and a “a fundamental step forward in the bank’s external lending standards”.

On June 4, the EIB issued a statement contrary to the June 3 news, maintaining that “as of today, the Bank has not taken any formal decision on whether to undertake an appraisal of this project” and that “the Bank requires further studies in order to decide whether it should undertake the formal appraisal of this project.”

EIB and Gibe 3 Dam

The European Investment Bank regularly appraises projects unofficially through what it calls pre-appraisals, in order to avoid the formal accountability mechanisms that apply once official appraisals begin. For two years, the Bank has conducted a shadow appraisal of the Gibe 3 Dam under the guise of a pre-appraisal. It has used the shadow nature of this involvement to deny affected communities and civil society the right to access project information and to complain.

The Bank is also funding the project’s Economic, Financial and Technical Assessment together with the African Development Bank, and has refused to disclose the Assessment’s terms of reference, the consultancy commissioned to carry out the assessment, and the commissioning date.

NGO call for Accountability

The June 3 announcement about the end of the European Investment Bank’s involvement with Gibe 3 may have been an inadvertent lapse of secrecy. Yet it was clear, explicit, official and confirmed by a competent third-party source. Friends of Lake Turkana, International Rivers and Counter Balance ask the EIB to make its full involvement in the Gibe 3 Dam, including what EIB officials communicated as the end of this involvement, public.

Caterina Amicucci of Counter Balance, said: “Despite speeches and theoretical commitments, the EIB remains largely unaccountable. Not only do EIB policies and guidelines need to be improved, but the Bank’s internal practices and cultural behavior too. As the house bank for the European Union’s financial endeavors, the EIB cannot hide its project operations in the shadows. Its internal actions must reflect a transparent and fully accountable institution.”

The European Investment Bank financed the Gilgel Gibe Dam and Gilgel Gibe 2 project in Ethiopia (for €41m and €50m, respectively), conducted a pre-assessment of the Gibe 3 Dam in the same river basin, and decided to fund the Gibe 3’s Economic, Financial and Technical Assessment, currently underway. The EIB has not responded to several, previous media reports which have claimed the Bank’s position as both in support and not in support of the project.