After 20 Years the World Bank will Begin to Finance Mega-Dams Again

Most African nations and people suffer greatly from poverty, with very few having access to running water, or even electricity. Supplying electricity to the poor could truly transform the continent, so why has nothing been done about it?

To be honest efforts have been made. In the 1950s and 1960s, global organisations invested billions to construct mega dams in Africa which were meant to modernise the countries and improve the living standards for millions. Unfortunately the World Commission on Dams discovered that such large projects always cost far too much, and ended up generating far less energy than anticipated.

The Guardian used the Inga 1 and 2 dams on the Congo River as an example of large hydroelectric projects that have failed to benefit the people of Africa in the way initially imagined. The dams cost billions, yet 85% of the energy produced is used by large consumers with less than 10% of the population actually benefitting from access to electricity. On top of that is the fact that communities relocated due to the dams are still waiting for compensation after 50 years.

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Following public pressure the World Bank, along with other institutions financing mega-dams around the world began to withdraw their support in the 1990s.

Now, after 20 years, and encouraged by successful mega-dam projects in Brazil and China, the World Bank is once more interested in lending its financial support to the sector, stating that large hydroelectric dams could“catalyse very large-scale benefits to improve access to infrastructure services.”

The problem is that, whilst the managing of huge hydropower dam construction projects is far more efficient now, there are other sources of energy that could benefit Africa, and other poor nations, far more.

Wind and solar power installations have overtaken new hydropower capacity over the past few years, due to the fact that they offer, not only clean sources of renewable energy, but are much easier to install in local rural communities.

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The Inga 2 dam with the Inga 1 dam in the background. (skyscrapercity)

Again the Guardian returns to the mega dams in the Democratic Republic of Congo as an example, where the World Bank believes that the $12 billion Inga 3 dam shows a great illustration of the new types of dams it will be supporting, even though the energy produced will mostly be used by mining companies and the middle class of South Africa.

The problem is that the World Bank is a bank, run by bankers. They think of the projects in terms of return on investment and risk; and unfortunately, as revealed in a leaked 2011 strategy paper, the “ratio of preparation and supervision costs to total project size” is far larger for small projects, such as solar and wind, than large, centralised developments. This means that the bankers see less incentive to invest in small projects over large ones.

By. Joao Peixe of Oilprice.com