programme for infrastructure development in africa (pida) adn the african development bank (afdb)

The Programme for Infrastructure Development in Africa (PIDA) and the African Development Bank (AfDB) A discussion paper on some aspects of the continent-wide infrastructure programme

Berne Declaration, Switzerland

Birgit Zimmerle March 2013

Erklärung von Bern / Berne Declaration

Who we are and what we do The Berne Declaration, Switzerland, is a non-governmental organization founded in 1968 which now has 21,000 members. Through research, public education and advocacy work, the Berne Declaration promotes more equitable, sustainable and democratic North–South relations. It monitors the role of Swiss corporations, banks, government agencies and the World Bank and addresses the problems of unequal international trade and financial relations, climate finance issues and unsustainable consumption patterns.

Berne Declaration Dienerstrasse 12, 8026 Zürich, Switzerland Phone +41 44 2 777 000, Fax +41 44 2 777 001 www.evb.ch, [email protected]

Acknowledgements Many thanks to Sena Alouka (JVE International), Ikal Angelei (FOLT) and Joshua Klemm (BIC) for their valuable comments.

Imprint Written by: Birgit Zimmerle, independent author, Berlin Editor: Christine Eberlein, Berne Declaration English proof reading and selected translations: Malte Forstat, Berlin Photo title page: Rich Beilfuss. Cahora Bassa Dam. Currently, 13,000 megawatts of new large-dam hydro is proposed for the Zambezi and its tributaries. An in-depth study, commissioned by International Rivers and written by Dr. Richard Beilfuss, assesses the hydrological risks for hydropower dams on the Zambezi River and gives an early warning about what Southern Africa could be facing as it contemplates plans for more large hydropower dams in a time of climate change. For more information visit: www.internationalrivers.org/node/7673

Citation Berne Declaration (2013). The Programme for Infrastructure Development in Africa (PIDA) and the African Devel-opment Bank (AfDB). A discussion paper on some aspects of the continent-wide infrastructure programme. Zurich: Berne Declaration.

http://www.evb.ch/

http://www.internationalrivers.org/node/7673

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Contents

Acronyms ...................................................................................................................................... 2

1 Introduction .............................................................................................................................. 3

2 International Drivers of large-scale infrastructure in Africa .................................................. 4

Infrastructure Consortium for Africa ................................................................................................... 4 2.1

EU-Africa Infrastructure Trust Fund.................................................................................................... 4 2.2

G20 High Level Panel on Infrastructure .............................................................................................. 5 2.3

3 PIDA – Programme for Infrastructure Development in Africa ............................................... 6

The Programme ..................................................................................................................................... 6 3.1

PIDA’s Priority Action Plan (PAP)........................................................................................................ 7 3.2

3.2.1 PIDA by sector ............................................................................................................................ 8

3.2.1.1 PIDA’s Energy Impact ...................................................................................................... 8

3.2.1.2 PIDA’s Transboundary Water Impacts .......................................................................... 10

3.2.1.3 PIDA’s Transport Impact ............................................................................................... 11

3.2.1.4 PIDA’s Information and Communication Technology (ICT) Impact ........................... 12

Financing PIDA ................................................................................................................................... 13 3.3

4 African Development Bank .................................................................................................... 14

History in a Nutshell .......................................................................................................................... 14 4.1

Structure and Governance .................................................................................................................. 14 4.2

Disclosure Policy and Framework for CSO engagement .................................................................. 18 4.3

Energy Sector Policy AfDB ................................................................................................................. 18 4.4

The Bank’s Complaints Mechanism .................................................................................................. 19 4.5

AfDB and PIDA ................................................................................................................................... 20 4.6

5 Who benefits from large-scale infrastructure? Concerns of civil society ........................... 21

6 Conclusion .............................................................................................................................. 28

Further Reading .......................................................................................................................... 30

Further Information .................................................................................................................... 31

Annex 1: Executive Directors of the African Development Bank (31 January 2013) .............. 32

Annex 2: PIDA Priority Action Plan, Projects by Sector ........................................................... 33

2 The Programme for Infrastructure Development (PIDA) and the African Development Bank (AfDB)

Acronyms

AfDB African Development Bank Group

ADB African Development Bank

ADF African Development Fund

CMRU Compliance Review and Mediation Unit

CSO Civil Society Organisation

ECOWAS Economic Commission for West Africa

ESP Energy Sector Policy

HLP High Level Panel

ICT Information and Communication Technology

IDB Internally Displaced Person

IRM Independent Review Mechanism

MDB Multilateral Development Bank

NEPAD The New Partnership for Africa’s Development

NGO Non-Governmental Organisation

NPCA New Partnership for Africa’s Development Planning and Coordination Agency

PAP Priority Action Plan

PIDA Programme for Infrastructure Development in Africa

PPP Public Private Partnership

REC Regional Economic Community

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1 Introduction

Through a number of international initiatives, more light has been shed on the African continent – and also the African Development Bank (AfDB). The Millennium Development Goals (2000), several G8 and G20 summits, the Africa-EU Strategic Partnership (2007) – just to name a few – triggered huge financial commitments. A high priority is given to upgrading regional infrastructure and promoting large-scale agriculture. Such measures are mainly intended to give Africa the strength to be successful in the global economy, and in both areas the AfDB is very much involved.

The AfDB is a multilateral development bank which was founded in 1964 to support economic devel-opment in Africa. While the World Bank Group, the European Investment Bank and other multilateral development banks have been in the focus of civil society for many years, the African Development Bank has not attracted as much attention – apart from some highly controversial projects such as the Bujagali Dam in Uganda or the Gibe III dam project in Ethiopia.

As Africa urgently needs investments in infrastructure, the AfDB has focused its funding on infrastruc-ture projects. At the same time it is an important partner in establishing the Programme for Infrastruc-ture Development in Africa (PIDA), a major programme across Africa in the areas of energy, water, transport as well as information and communication technology, scheduled until the year 2040. PIDA is a joint initiative of the African Union Commission (AUC), the New Partnership for Africa’s Development Planning and Coordination Agency (NPCA) and the AfDB.1

There is no doubt that Africa needs significant investment in infrastructure, however, affected people and civil society organisations are concerned about the focus on large-scale activities such as mega dams and increasing incentives for the private sector. They question whether this will really contribute to the AfDB’s declared objective to foster sustainable development and poverty reduction.

While PIDA was adopted by the African Union in January 2012, hardly anybody outside the circles of those involved in its elaboration seems to be aware of it. With this paper, the Berne Declaration, Switzer-land wants to raise general awareness of the programme and its possible implications. Switzerland is one of the non-regional member countries of the AfDB and therefore also accountable for its activities. In 1982 Switzerland was among the first non-regional members of the AfDB.2 One major motive for being a member in the AfDB – apart from contributing to policies and influencing the priorities of the bank – is to provide Swiss companies with opportunities for submitting bids to the AfDB.

Content of the paper: After a glance at some major drivers of large infrastructure in Chapter 2, Chapter 3 provides a short overview on the newly approved Programme for Infrastructure Development (PIDA). Chapter 4 takes a closer look at the AfDB, its structure, its recently approved policies regarding access to information and energy as well as its complaints mechanism; its final section sheds light on the Bank’s role in PIDA, especially related to large projects in the energy sector. Chapter 5 summarises concerns of civil society related to some PIDA projects and large infrastructure in general. Chapter 6 is a conclusion and provides for further discussion. The research was conducted mainly as a desk study, with some ad-ditional interviews.

1 NEPAD, African Union, AfDB, Study on Programme for Infrastructure Development in Africa (PIDA), Phase III, PIDA Study Synthesis, September 2011; http://www.afdb.org/fileadmin/uploads/afdb/Documents/Project-and-Operations/PIDA%20Study%20Synthesis.pdf

2 African Development Bank, AfDB in Brief; http://www.afdb.org/fileadmin/uploads/afdb/Documents/Publications/AfDB%20in%20Brief.pdf

http://www.afdb.org/fileadmin/uploads/afdb/Documents/Project-and-Operations/PIDA%20Study%20Synthesis.pdf



2 International Drivers of large-scale infra-structure in Africa

The strong international commitments to support Africa in its development process led to a number of new initiatives, especially dedicated to support infrastructure programmes and projects. They have been promoting large-scale infrastructure for years and have contributed to create the enabling environment for the Programme for Infrastructure Development in Africa (PIDA).

Infrastructure Consortium for Africa3 2.1

The Infrastructure Consortium for Africa (ICA) is a major G8 initiative (established at the Gleneagles summit 2005) designed to improve and accelerate progress in meeting Africa’s urgent infrastructure needs. The ICA addresses both national and regional constraints to infrastructure development, with an emphasis on regional infrastructure integration. In encouraging and promoting the development of Afri-can infrastructure projects, the ICA supports the continent’s economic growth and development. The ICA Secretariat is hosted by the African Development Bank in Tunis.

“The ICA creates a tripartite relationship between bilateral donors, multilateral agencies and Afri-can institutions. • On the African side, ICA is headed by the African Development Bank and the Development

Bank of Southern Africa, while the African Union Commission (AUC), NEPAD Secretariat and Regional Economic Communities participate at ICA meetings as observers.

• Multilateral agencies that are ICA members: World Bank, International Finance Corporation (IFC), European Commission (EC) and European Investment Bank (EIB).

• All G8 countries are members of the ICA (Canada, France, Germany, Italy, Japan, Russia, United Kingdom, United States).

• In 2011, ICA members decided to enlarge membership to include all G20 countries.

Other donors making significant financial contributions to infrastructure in Africa may become members of the ICA.”4

EU-Africa Infrastructure Trust Fund 2.2

In the context of the Gleneagles Declaration on Africa emerging from the 2005 G8 summit and the EU Council’s adoption of an EU Strategy for Africa (December 2005)5, the EU and its African counterparts initiated a Partnership for African Infrastructure. The EU-Africa Infrastructure Trust Fund is an instru-ment of this Partnership.

“To support the implementation of the Partnership, the EU-Africa Infrastructure Trust Fund (the Trust Fund) was launched in 2007. It encourages the financing of infrastructure programmes which facilitate interconnectivity and regional integration on the African continent. It aims to support synergies between European development agencies for the benefit of Africa, leveraging additional funds by combining grants from the European Commission and EU member states with long-term loan finance made available by eligible financiers.” 6

3 http://www.icafrica.org/en/about-ica/ 4 http://www.icafrica.org/en/about-ica/ica-contributors/ 5 http://www.eu-un.europa.eu/articles/en/article_5453_en.htm 6 http://www.eu-africa-infrastructure-tf.net/

http://www.eu-africa-infrastructure-tf.net/

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G20 High Level Panel on Infrastructure 2.3

In November 2011 the G20, The World Bank and other multilateral development banks (MDBs) prepared a new strategy for infrastructure development. A High Level Panel on Infrastructure proposed to focus public support on strategic regional infrastructure projects, such as large dams and transport corridors, and to make them attractive for private investment through public guarantees and other incentives. They identified 11 exemplary regional projects.7 For sub-Saharan Africa the High Level Panel on Infrastruc-ture has identified the following projects:

• West Africa Power Pool (WAPP) • Ethiopia and Kenya Power Systems Interconnection • Inga Hydropower • North-South Corridor (NSC) • Isaka-Kigali Railway

While the High Level Panel chairman stressed that the Panel was “an innovation in terms of involving the private sector in G20 discussion"8, NGOs called for the public disclosure of the latest draft and re-quested that they be consulted. “In a letter to the panel, 73 NGOs from 39 countries called for civil socie-ty consultation and public disclosure of the HLP report in November 2011. The lack of accountability is typical for the whole G20 process. While the private sector has been invited to play a prominent role at G20 events and in bodies such as the HLP, civil society groups and trade unions have been locked out of the room.” 9

They raised a number of governance-related concerns:10

• Heavy emphasis on large-scale, centralised projects and the private sector • Excessive focus on Public Private Partnerships (PPP) (PPP approaches tested in developed countries

may be difficult to adopt in developing nations because of different institutions, norms and practic-es.)

• Inadequate risk-mitigation requirements (Infrastructure projects are highly vulnerable to political, regulatory, execution and economic risks. While economic risks are discussed in the report, environ-mental, social, regulatory, and political risks are not mentioned in the report.)

• Insufficient stakeholder engagement (civil society, affected communities) • Financial concerns (increase of debt burden for low-income countries; risk that many consumers will

be unable to afford access to these new infrastructure services)

These initiatives are also fully supportive of the Programme for Infrastructure Development in Africa – either through donor coordination, direct financing of certain measures or PIDA projects like the hydro-power schemes.

7 High Level Panel on Infrastructure, Recommendations to G20 – Final Report, 26 October 2011; http://www.boell.org/downloads/HPL_Report_on_Infrastructure_10-26-2011.pdf

8 Ibid. 9 Peter Bosshard, Infrastructure for Whom? A Critique of the Infrastructure Strategies of the Group of 20 and the World Bank,

International Rivers 2012; http://www.internationalrivers.org/resources/infrastructure-for-whom-7454 10 WRI Insights, Denise Leung and Athena Ballesteros, Improved Governance needed in G20’s Report on Infrastructure Develop-

ment, 5 September, 2012; http://insights.wri.org/news/2012/09/improved-governance-needed-g20s-report-infrastructure-development

http://www.boell.org/downloads/HPL_Report_on_Infrastructure_10-26-2011.pdf

http://www.internationalrivers.org/resources/infrastructure-for-whom-7454

http://insights.wri.org/news/2012/09/improved-governance-needed-g20s-report-infrastructure-development



3 PIDA – Programme for Infrastructure Devel-opment in Africa

This chapter will introduce PIDA, the Programme for Infrastructure Development in Africa. As its pro-jections go as far as 2040, it has lasting ramifications for Africa’s development.

The Programme 3.1

The leaders of the African Union and the AfDB have a common vision: To develop Africa into an emerg-ing destination for investors and development actors and into a common high-growth market for goods and services. They assume that the average economic growth rate for African countries will remain at 6% a year between 2010 and 2040, which will bring continuous growth and prosperity but also swell the demand for infrastructure.

PIDA was created as the answer to this vision: It is the first continent-wide infrastructure programme, based on regional projects and programmes that will help address the infrastructure deficit that severely hampers Africa’s competitiveness in the world market. Thus, the overall goal of PIDA is to promote so-cio-economic development and poverty reduction in Africa through improved access to integrated re-gional and continental infrastructure networks and services.

The programme was developed after two years of planning and extensive consultation with stakeholders and integrates existing and previous continental infrastructure initiatives. PIDA was designed to support the implementation of the African Union Abuja Treaty and the creation of the African Economic Com-munity. The African Union finally approved PIDA in January 2012 as a joint initiative of the African Union Commission (AUC), the New Partnership for Africa’s Development Planning and Coordination Agency (NPCA) and the African Development Bank (AfDB).11

The AfDB was assigned a central role as Executing Agency. This covers the responsibility for contractu-al, financial, technical and administrative management of the programme, including accountability for procurement procedures in conformity with its existing regulations, budget management and disburse-ments. This means that the AfDB plays a vital role in planning and implementing PIDA.

The promoters of PIDA are aware of substantial issues potentially limiting success: In many African countries, regional and continental policies have not been thoroughly and consistently written into na-tional legislation, or too often, policies are not enforced. During the thorough PIDA planning process, actors diagnosed the lack of policy alignment and harmonisation, not just inadequate funding, as the principal drags on efficiency. As these inefficiencies are costing Africa billions of dollars, PIDA aims to offer policymakers a ready-made list of priorities that address physical infrastructure needs and it ad-dresses the soft issues of governance.

The elaboration of PIDA was based on experiences from other large and continent-wide infrastructure programmes, such as the Initiative for the Integration of the Regional Infrastructure of South America (IIRSA) – a programme that has been criticised by civil society for solely relying on large-scale infra-structure and neglecting the social and environmental damages it causes, e.g. in the Amazon.

11 NEPAD, African Union, AfDB, Study on Programme for Infrastructure Development in Africa (PIDA), Phase III, PIDA Study Synthesis, September 2011, http://www.afdb.org/fileadmin/uploads/afdb/Documents/Project-and-Operations/PIDA%20Study%20Synthesis.pdf



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PIDA’s Priority Action Plan (PAP) 3.2

PIDA developed short- (2020), medium- (2030) and long-term (2040) priorities for meeting identified infrastructure demands in all four sectors (transport, energy, transboundary water resources, information and communication technology).

For the period of 2012 to 2020, a Priority Action Plan (PAP) was established, that determines the most important projects. It details the immediate way forward by presenting actionable projects and pro-grammes that promote sound regional integration. The promoters of PIDA claim that this process has true African ownership, as it was developed in a thorough consultation process from the outset with the Regional Economic Communities (RECs), the power pools, the lake and river basin organisations, spe-cialised agencies, sector ministers and other relevant development stakeholders.

The PAP will require an estimated USD 67.9 billion. (For detailed information on the PAP projects in different sectors, see Annex 2). The following table12 shows the costs of the PAP projects by sector. Most of the money (59,4%) was earmarked for the energy sector, transport (37,4%) coming second.

Sector Number of projects Cost (USD billions)

Transport 24 25.400

Energy 15 40.300

TWR 9 1.700

ICT 3 0.5

Total 51 67.9

Figure 3: Number and Costs of PAP-Projects by Sector (Source: NEPAD, African Union, AfDB, Study on Pro-gramme for Infrastructure Development in Africa (PIDA), Phase III, PIDA Study Synthesis, September 201113)

The PAP identified the following urgent activities within the respective areas:

• Transport: connectivity, corridor modernisation, ports and railways modernisation, air transport modernisation

• Energy: hydropower, interconnections, pipelines • Transboundary Water Resources (TWR): multipurpose dams, capacity building, water transfer • Information and Communication Technology (ICT): capacity building, land interconnection infra-

structure, internet exchange points.

12 NEPAD, African Union, AfDB, Study on Programme for Infrastructure Development in Africa (PIDA), Phase III, PIDA Study Synthesis, September 2011, http://www.afdb.org/fileadmin/uploads/afdb/Documents/Project-and-Operations/PIDA%20Study%20Synthesis.pdf

13 http://www.afdb.org/fileadmin/uploads/afdb/Documents/Project-and-Operations/PIDA%20Study%20Synthesis.pdf





Figure 4: Breakdown of costs in the PAP by region (Source: NEPAD, African Union, AfDB, Study on Programme for Infrastructure Development in Africa (PIDA), Phase III, PIDA Study Synthesis, September 201114) The regional distribution of PAP shows the relatively small weight of West Africa in the investments proposed. This is because the projects proposed in the region have smaller funding requirements than those for Central or East Africa. 15

3.2.1 PIDA by sector

This chapter gives an overview of the projects presently planned in the four sectors and is based on offi-cial documents on PIDA. The graphics show all projects (until 2040), whereas the charts show the short-term projects (until 2020) in the pipeline of the Priority Action Plan. A critical analysis of some of the projects and general concerns of civil society will follow in Chapter 5.

3.2.1.1 PIDA’s Energy Impact

According to PIDA’s Energy Vision, the programme will develop “efficient, reliable, cost-effective and environmentally friendly infrastructure for the physical integration of the continent and enhance access to modern energy services for the majority of the African population by:

• Developing regional and continental clean power generation and transmission projects • Implementing high-capacity oil refineries and oil and gas pipeline projects • Developing renewable energy resources.”

15 projects are planned, which together cost USD 40.3 billion (see graphic and project list in Annex 2). Next to building large dams, oil- and gas pipelines, PAP envisions to build a 4100 kilometre gas pipeline for exporting natural gas to Europe. This goes in line with building high power transmission lines be-tween 2000 and 8000 kilometres in length and measures to interconnect the power pools to meet the forecast increase in demand.16

The energy infrastructure programme focuses on major hydroelectric projects and interconnects the power pools to meet the forecast increase in demand. Regional petroleum and gas pipelines are also in-clude.

14 http://www.afdb.org/fileadmin/uploads/afdb/Documents/Project-and-Operations/PIDA%20Study%20Synthesis.pdf 15 Ibid. 16 Ibid.


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Figure 5: The ventures marked in red are projects in the Priority Action Plan until 2020; those marked in yellow are further projects to be implemented by 2040 (Source: African Development Bank, African Union, NEPAD, Pro-gramme for Infrastructure Development in Africa. Interconnecting, integrating and transforming a continent17)

17 http://www.afdb.org/fileadmin/uploads/afdb/Documents/Project-and-Operations/PIDA%20note%20English%20for%20web%200208.pdf

http://www.afdb.org/fileadmin/uploads/afdb/Documents/Project-and-Operations/PIDA%20note%20English%20for%20web%200208.pdf



3.2.1.2 PIDA’s Transboundary Water Impacts

PIDA’s water vision is to promote integrated water resource management to develop transboundary water infrastructure projects, strengthen transboundary management frameworks for regional integration and ensure water security for the socio-economic development of Africa.

The transboundary water programme mainly focuses on the development of so-called multipurpose dams. These are dams that have several functions: generating power, agricultural irrigation and regulat-ing rivers.

Figure 6: Source: African Development Bank, African Union, NEPAD, Programme for Infrastructure Development in Africa. Interconnecting, integrating and transforming a continent18.




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3.2.1.3 PIDA’s Transport Impact

PIDA’s Transport vision is to work towards an integrated continent where the transport infrastructure and services enable the free movement of goods and passengers by: linking the major production and consumption centres, providing connectivity among the major cities, defining the best hub ports and railway roots and opening the land-locked countries to improved regional and continental trade.

Figure 7: Source: African Development Bank, African Union, NEPAD, Programme for Infrastructure Development in Africa. Interconnecting, integrating and transforming a continent19.





3.2.1.4 PIDA’s Information and Communication Technology (ICT) Impact

PIDA’s ICT vision is to enable Africa to build an information society and an integrated digital economy in which every government, business and citizen has access to reliable and affordable ICT networks. In particular, the ICT aims to establish an enabling environment for completing the land-fibre optic infra-structure and installing internet exchange points in countries without them. It will connect each country to two different submarine cables to take advantage of the expanded capacity.20

Figure 8: Source: African Development Bank, African Union, NEPAD, Programme for Infrastructure Development in Africa. Interconnecting, integrating and transforming a continent21


21 Ibid.



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Financing PIDA 3.3

The long-term implementation costs of PIDA are currently estimated at more than USD 360 billion, while the costs of the Priority Action Plan (PAP) are USD 67.9 billion between 2012 and 2020 (see sec-tion 4.1.1). Given this large amount of money for African countries with national budgets averaging from 2 to 8 billion US dollars, the question is: Where will the money come from?

According to the document ‘Financing of the Programme for Infrastructure Development in Africa (PI-DA)22, the funding resources expected from domestic sources (public or private) may represent over 50% of total PIDA funding by 2020. The share would grow to about two-thirds by 2030 and as much as 75% by 2040. Official development assistance (ODA) will also play an important role, but these resources alone will not be enough. Therefore countries will have to attract private investment.

In addition to bringing in more private sector funds, the document suggests new and innovative sources and measures for financing, which are considered critical to PIDA’s success:

• Infrastructure Bonds • Loan guarantees to help assure private investors • Important role of Regional Economic Communities (RECs), i.e. through implementing a community

levy (for example Economic Commission for West Africa – ECOWAS)

PIDA’s document on financing is fully aware of a potential financing gap: “The scale of the required in-vestments means that all possibilities need to be leveraged, including non-Organisation for Economic Co-operation and Development sources such as Arab Funds, Brazil, China and India. Opportunities for financial innovation, such as climate finance, must be recognized and seized23.”

The document also stresses the need of better conditions for the private sector, namely insuring the risks of private investments. Enabling legislation and regulatory frameworks are called for to attract private investors for public-private partnerships (PPP).

22 United Nations Economic and Social Council – Economic Commission for Africa, African Union Commission, Financing of the Programme for Infrastructure Development in Africa (PIDA), March 2012

23 Ibid.


4 African Development Bank

History in a Nutshell 4.1

After most African countries achieved their political independence in the 1960s, they decided to take charge of their economic destinies as well. Thus, they founded the African Development Bank (AfDB) in 1964 – with at first only African countries among its members. In 1972, the African Development Fund (ADF) was established as an instrument of the AfDB to provide grants and concessional loans to the poorest African countries. The third institution in the African Development Bank Group is the Nigerian Trust Fund (NTF), which was established in 2004.

Since 1982, to obtain additional financial resources, the African Development Bank also opened up to countries outside of Africa. This enabled non-regional countries to have a say in the Bank. But the vision of an 'African Bank' continues, as about 60% of the capital is still held by African countries and even the ADF – although mainly financed by non-regional member countries - is still being controlled by a major-ity of African regional members. And the Bank attaches great importance to its African ownership: Its investment operations are exclusively in Africa and its president is always an African.

In the mid-nineties, the Bank went through a crisis that was followed by a readjustment and structural reforms. In 1999, the AfDB developed a new vision with the goal to turn it into a modern development bank. In early 2000, the organisational structure was also revised. Ever since, the declared focus of the Bank has been to promote sustainable growth and poverty reduction in its regional member countries.

Today, the Bank has 78 members, of which 53 are regional (African) members and 25 non-regional mem-bers. The AfDB is officially headquartered in Abidjan/Ivory Coast, but – due to the political situation there – has been temporarily relocated to Tunis/Tunisia. During the Annual Meeting in Lisbon in 2011, it was decided to return to Abidjan as soon as possible.

Structure and Governance24 4.2

The African Development Bank Group (AfDB) consists of three institutions under one management:

• The African Development Bank (ADB) • The African Development Fund (ADF) • The Nigeria Trust Fund

24 For detailed information see also http://www.afdb.org/en/about-us/

http://www.afdb.org/en/about-us/

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Figure 9: The Bank Group addresses the diverse needs of African countries (Source: The African Development Bank Group, Investor Presentation, September 2012.25).

It is Africa's most important development finance institution and one of the five major global multilat-eral development banks (MDBs). Since 2006, the Bank Group places greater emphasis on the following strategic areas:

• investing in infrastructure, • deepening private sector investment, • supporting economic and governance reforms, • promoting higher education, technology and vocational training, • promoting regional integration.

25 http://www.afdb.org/fileadmin/uploads/afdb/Documents/Investor%20Presentation%20September%202012%20for%20Website.pdf

http://www.afdb.org/fileadmin/uploads/afdb/Documents/Investor%20Presentation%20September%202012%20for%20Website.pdf


Figure 10: AfDB Sector Approvals, 2011 (Source: The African Development Bank Group, Financial Presentation 201226).

a) Board of Governors

The Board of Governors is the institution’s supreme decision making body. It comprises ministers and high-level officials of economic and financial institutions in the Bank’s member countries. The Board of Governors issues general directives concerning the operational policies of the Bank. For ADF’s Board of Governors, one governor represents each state participant, while governors of the African Development Bank are ex-officio governors of the Fund.

• Governors exercise the voting powers of their countries on the Board. Each AfDB member country has an equal number of basic votes in addition to a number of votes proportionate to its paid-in shares.

• No member country, or a group of countries has veto power; Board decisions are generally made through discussion and consensus rather than by voting.

• The governors meet annually to review the implementation of past policy decisions and to deliberate on new policy issues initiated by them or by the institution’s management.

• Decisions on certain issues concerning the AfDB are reserved for the governors. • Among these are the admission of new members, increase in the capital stock, amendments to the

institution’s Articles of Agreement and the election of the board of directors and the president.

b) Board of Directors

The Board is made up of 20 executive directors27, elected by the Board of Governors for a maximum of two three-year terms. Regional members have 13 directors, while the remaining seven come from non-regional countries. The Boards of AfDB and ADF exercise all the powers of the Bank, except those ex-pressly reserved for the Board of Governors by the agreement establishing the Bank. The Boards are re-sponsible for conducting the day-to-day operations of the Bank. With regard to the ADF Board compris-ing 14 directors, seven are appointed by the State Participants, while the other seven are designated by the African Development Bank from among the regional executive directors of the Bank. (For a list of directors and their constituencies, see Annex 1)

26 http://www.afdb.org/fileadmin/uploads/afdb/Documents/Financial-Information/AfDB_presentation_v32_pc_FINAL%20For%20Website.pdf

27 Further information see: http://www.afdb.org/en/about-us/structure/board-of-directors/

http://www.afdb.org/en/about-us/structure/board-of-directors/

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c) President

Elected by the Board of Governors, on the recommendation of the Board of Directors, the president is the chief executive and conducts the business of the Bank. He is also the legal representative of the Bank and elected for a maximum of two five-year terms. The current president is the Rwandan economist Donald Kaberuka.

Figure 11: Source for map: Investor Presentation, The African Development Bank Group, March 201228; Source for data: Investor Presentation, The African Development Bank Group, September 201229.

28 http://www.afdb.org/fileadmin/uploads/afdb/Documents/Financial-Information/Investor%20Presentation%20March%202012.pdf 29 http://www.afdb.org/fileadmin/uploads/afdb/Documents/Investor%20Presentation%20September%202012%20for%20Website.pdf

Europe Austria 0.5% Netherlands 0.9% Belgium 0.6% Norway 1.2% Denmark 1.2% Portugal 0.2% Finland 0.5% Spain 1.1% France 3.7% Sweden 1.5% Germany 4.1% Switzerland 1.5% Italy 2.4% UK 1.7%

Asia China 1.1% India 0.2% Japan 5.5% Korea 0.5%

Middle East Kuwait 0.5% Saudi Arabia 0.2%

Americas Argentina 0.3% Brazil 0.4% Canada 3.7% USA 6.6%

Africa Algeria 4.2% Djibouti 0.02% Libya 4.0% Senegal 1.1% Angola 1.2% Egypt 5.4% Madagascar 0.7% Seychelles 0.03% Benin 0.2% Eq. Guinea 0.2% Malawi 0.3% Sierra Leone 0.2% Botswana 1.1% Eritrea 0.03% Mali 0.4% Somalia 0.03% Burkina Faso 0.4% Ethiopia 1.6% Mauritania 0.1% South Africa 4.8% Burundi 0.2% Gabon 1.2% Mauritius 0.6% Sudan 0.4% Cameroon 1.1% Gambia 0.2% Morocco 3.5% Swaziland 0.1% Cape Verde 0.1% Ghana 2.3% Mozambique 0.6% Tanzania 0.8% Cent. Afr. Rep. 0.04% Guinea 0.4% Namibia 0.3% Togo 0.2% Chad 0.1% Guinea Biss. 0.03% Niger 0.3% Tunisia 1.4% Comoros 0.01% Kenya 1.5% Nigeria 9.3% Uganda 0.5% Congo 0.5% Lesotho 0.1% Rwanda 0.1% Zambia 1.3% Côte D’Ivoire 3.7% Liberia 0.2% Sao Tome & P. 0.1% Zimbabwe 2.1% Dem. Rep. Congo 1.0%

Prospective members Australia Luxembourg Turkey

AfDB member countries and AfDB shareholding


Disclosure Policy and Framework for CSO engagement 4.3

In recent years the AfDB has been widely criticised for its lack of transparency and communication poli-cy especially related to communities affected by AfDB projects. CSOs have long advocated for greater transparency to be able to defend their rights. The AfDB has lately started a process of developing new or improving existing policies and guidelines.

One of the first open engagements between the Bank and CSOs was the consultation process regarding the Bank’s disclosure policy. The CSO coalition that was working on the AfDB submitted an extensive set of recommendations and comments on the policy draft30 and was involved in numerous face-to-face consultations. Many recommendations were incorporated into the final policy. The AfDB made im-portant improvements in its new Disclosure and Access to Information Policy31 which became effective on February 3, 2013. It regulates the procedures and type of information disclosed to the public and re-quires the AfDB to make public all documents where there is no compelling reason for confidentiality.

The Civil Society Engagement Framework is another important step of the AfDB to improve communica-tion with civil society and decision-making processes.

The new Disclosure Policy and the Civil Society Engagement Framework for CSO engagement bring sub-stantial improvements but to date the CSO Coalition remains concerned about the Bank’s ability and willingness to implement them. The AfDB still has to prove how serious these new efforts will be taken within the Bank and how capable it is to incorporate these policies into their day-to-day work.

Energy Sector Policy AfDB 4.4

As the focus of this paper is on infrastructure development and draws special attention to the energy sector, it is important to have a closer look at the new AfDB energy sector policy32, approved in Septem-ber 2012. It outlines the vision to provide a sustainable and cleaner energy supply that ensures universal access to modern, affordable and reliable energy services by 2030. The Bank Group strives to support Regional Economic Communities (RECs) in their efforts to achieve and maintain access to high-standard energy services for all and to assist in developing a socially, economically and environmentally sustain-able energy sector.

Despite these noble intentions, the Energy Sector Policy received wide-spread criticism, especially from Non-Governmental Organisations. They complained that the Energy Policy was separated from the Ener-gy Strategy although the Strategy, which outlines the actual implementation, would have revealed many critical gaps and implementation issues. Although the guiding principles of the paper and the fact that the Bank will support clients to look at different energy options are a big step forward, the CSO coalition on the AfDB disclosed several severe contradictions and raised critical points33:

• The CSO coalition delivered a series of demands and particularly asked the AfDB to focus more on pro-poor energy delivery.

• While NGOs applaud that the AfDB Group will not support oil and gas exploration activities, the Group plans to actively support pipelines to carry oil and gas supplies from fields to markets.

• Whilst the Bank will promote renewable energies and climate friendly energy projects to reduce CO2 emissions, it will continue to promote fossil fuels including coal projects – which are amongst the

30 http://www.coalitionafdb.org/wp-content/uploads/2012/09/CSO-Coalition-Submission-9-Aug-2011.pdf 31 http://www.afdb.org/fileadmin/uploads/afdb/Documents/Policy-

Documents/Bank%20Group%20Policy%20on%20Disclosure%20and%20Acess%20to%20Infomation.pdf 32 http://www.afdb.org/en/news-and-events/article/the-bank-group-policy-on-energy-sector-approved-by-the-board-of-directors-10042/ 33 www.coalitionafdb.org

http://www.coalitionafdb.org/wp-content/uploads/2012/09/CSO-Coalition-Submission-9-Aug-2011.pdf

http://www.afdb.org/fileadmin/uploads/afdb/Documents/Policy-Documents/Bank%20Group%20Policy%20on%20Disclosure%20and%20Acess%20to%20Infomation.pdf

http://www.afdb.org/fileadmin/uploads/afdb/Documents/Policy-Documents/Bank%20Group%20Policy%20on%20Disclosure%20and%20Acess%20to%20Infomation.pdf

http://www.afdb.org/en/news-and-events/article/the-bank-group-policy-on-energy-sector-approved-by-the-board-of-directors-10042/

http://www.coalitionafdb.org/

© EvB, 2013 19

highest CO2 emitters and contradict the path towards the transformation to a low carbon sustainable development.

• Although the new Energy Sector Policy talks about promoting renewable energy, a closer look reveals that it will strongly support the building of large hydropower. Thereby it will focus also on promot-ing multipurpose dams for electricity generation, irrigation, domestic and industrial water supply. A type of dam which in the past has received wide-spread criticism for conflict of interest.

• There are no targets for specific energy options, but those will hopefully be taken into account in the Energy Strategy.

The Bank’s Complaints Mechanism 4.5

In 2006, the Bank Group established the Independent Review Mechanism (IRM), which is comparable to the Inspection Panel at the World Bank. People negatively affected by Bank projects can write to the AfDB to investigate the project, if they feel that an AfDB project is adversely impacting their livelihoods or the environment. It is important to note, that all of the projects which the IRM has assessed so far are infrastructure projects, including hydropower dams:

• Bujagali Hydropower and Transmission projects in Uganda (2007) • Gibe III project in Ethiopia • Nuweiba Power Plant in Egypt • Marrakesh-Agadir Motorway in Morocco • Dakar-Diamniadio Highway in Senegal

The IRM34 handles requests through two functions: Compliance Review, and Mediation (problem solv-ing). For public sector projects, the IRM can review compliance with all of the Bank Group’s operational policies and procedures. For the private sector, compliance reviews can only be undertaken for social and environmental policies.

The Mechanism comprises the Compliance Review and Mediation Unit (CRMU) and the Roster of Ex-perts. The roster of three experts, appointed by the Board of Directors for a single five-year term, review each complaint and together with the director of the CRMU determine eligibility of request(s) for com-pliance review. The Boards of Directors or the president then finally decide whether or not to undertake the compliance review.

The CRMU collaborates with Non-Governmental Organisations (NGOs) and Civil Society Organisations35 (CSOs) to disseminate information about the IRM.

Suggestions for improvement

Although the rules and procedures of operation were somewhat improved in 2010, much remains to be done. Per Eldar Sovik, the former IRM Director, in an interview in late January 2012 (before he resigned) stressed the following measures in order to improve the mechanism36:

• Simplify some of the procedures to let CRMU get involved at an earlier stage and to make it easier for affected people living in remote areas to address the Bank.

34 http://www.afdb.org/en/about-us/structure/independent-review-mechanism/ 35 The AfDB’s official definition is as follows: “…The Myriad of civic organisations in civil society include, but are not limited to,

non-governmental orgisations (NGOs), people’s and professional organisations, trade unions, cooperatives, consumer and hu-man rights groups, women’s associations, youth clubs, independent radio, television, print and electronic media, neighbour-hood or community-based coalitions, religious groups, academic and research institutions, grassroots movements and organisa-tions of indigenous peoples.” http://www.afdb.org/fileadmin/uploads/afdb/Documents/Policy-Documents/Framework%20for%20Enhanced%20Engagement%20with%20Civil%20Society%20Organizations.pdf

36 http://www.afdb.org/en/news-and-events/article/it-is-more-important-for-the-bank-to-be-alerted-when-a-policy-is-violated-outgoing-compliance-review-mechanism-unit-director-per-eldar-sovik-8802/

http://www.afdb.org/en/about-us/structure/independent-review-mechanism/

http://www.afdb.org/fileadmin/uploads/afdb/Documents/Policy-Documents/Framework%20for%20Enhanced%20Engagement%20with%20Civil%20Society%20Organizations.pdf

http://www.afdb.org/fileadmin/uploads/afdb/Documents/Policy-Documents/Framework%20for%20Enhanced%20Engagement%20with%20Civil%20Society%20Organizations.pdf

http://www.afdb.org/en/news-and-events/article/it-is-more-important-for-the-bank-to-be-alerted-when-a-policy-is-violated-outgoing-compliance-review-mechanism-unit-director-per-eldar-sovik-8802/

http://www.afdb.org/en/news-and-events/article/it-is-more-important-for-the-bank-to-be-alerted-when-a-policy-is-violated-outgoing-compliance-review-mechanism-unit-director-per-eldar-sovik-8802/


• All applicable policies for the Bank’s private sector operations should be subject to compliance re-view.

• Stakeholders not necessarily directly affected by a project should still be eligible to lodge requests for compliance review.

For the former IRM director “it is more important for the Bank to be alerted when a problem arises or a policy of the Bank is violated than who actually informed the Bank and the CRMU about the pertinent problem”. He suggests that these issues could be considered during the next review of the IRM, which is due in mid-2013. Looking at the projects in the infrastructure pipeline (see Chapter 3), this is a good opportunity for civil society to engage in this review in order to make the mechanism more accessible for all and eliminate ‘special conditions’ for the private sector.

AfDB and PIDA 4.6

Infrastructure has been at the core of the AfDB’s development assistance. In addition the Bank hosts the secretariat of the Infrastructure Consortium in Africa (ICA), was the executing agency for the PIDA study and is expected to have a leading role in financing and implementing PIDA.

Together with the African Union Commission and the NPCA the AfDB will also facilitate fundraising efforts and support project implementation and monitoring.

The energy infrastructure programme focuses on major hydroelectric projects and connects the power pools between countries to meet the forecast increase in demand. For the PAP (projects until 2020), nine hydropower projects were identified, amounting to more than 50 GW of potential capacity representing 40 per cent of the actual installed capacity of the continent. According to Professor Mosad Elmissiry, head of the energy division of the NPCA “the hydroelectricity projects had been prioritised, owing to the fact that it was a low-carbon energy source that was abundant and largely untapped.”37 To date, the AfDB has been involved in five of the PAP hydropower projects:

• “The Mphanda-Nkuwa project in Mozambique, which is at the financial closure stage. It will con-tribute to supply energy both to Mozambique and to South Africa.

• The Inga hydropower projects in the Democratic Republic of Congo (DRC). Grand Inga will have to be built in several phases. When fully built, it will transform Africa by providing electricity to a large part of the continent with transmission lines interconnecting several countries.

• Hydropower components of the Lesotho Highlands water project Phase II, which will supply power to Lesotho and South Africa.

• The Ruzizi III project in Rwanda will provide additional electricity capacity in Rwanda, Burundi and the DRC. It is the first regional Public Private Partnership (PPP) power project in Africa and is a mod-el for successful implementation.

• The Rusumo Falls development. The electricity produced will supply Tanzania, Rwanda and Burun-di.”38

The GIBE III dam in Ethiopia is also part of the PAP projects in the energy sector, and was also supposed to be an AfDB-funded project. However, after having reviewed the project through the Independent Re-view Mechanism as a result of objections from civil society, the Bank stepped back from funding it. The Board nevertheless approved funding of the transmission lines that will transport electricity from GIBE III to neighbouring countries and become part of the overall African interlinked system.

For concerns of civil society related to the dams listed here, see Chapter 5.

37 www.engineeringnews.co.za/article/africa-aims-to-implement-15-cross-border-energy-projects-worth-405bn-by-2020-2012-09-25 38 African Development Bank, Large scale hydropower projects supported by AfDB to transform Africa, March 22, 2013;

http://www.afdb.org/en/news-and-events/article/large-scale-hydropower-projects-supported-by-afdb-to-transform-africa-11627/?utm_source=twitterfeed&utm_medium=twitter

http://www.engineeringnews.co.za/article/africa-aims-to-implement-15-cross-border-energy-projects-worth-405bn-by-2020-2012-09-25



© EvB, 2013 21

5 Who benefits from large-scale infrastruc-ture? Concerns of civil society

The Programme for Infrastructure Development in Africa (PIDA), the various G8 and G20 initiatives on infrastructure and the AfDB’s energy policy have at least one thing in common: They stress the im-portance of sustainable development, inclusive growth and poverty reduction. And they all rely heavily on large dams to supply hydropower, water for irrigation and regulation of rivers. On top, PIDA is a framework of infrastructure projects and programmes with the aim of boosting trade and encouraging growth all over Africa, connecting all African countries, and implemented by the joint efforts of African leaders. In addition to improving transport and communication infrastructure, the focus is on better en-ergy and water supplies – all of which are urgently needed.

Yet, these programmes and especially PIDA have numerous loopholes and risks, which are summarised in this chapter. Some of these risks are even mentioned in the actual documents of PIDA, others have been expressed by civil society related to specific projects that were already debated before PIDA was approved, but which are now part of the continent-wide programme.

a) Designed to benefit large-scale enterprises

The first question is: Who benefits from PIDA projects? In addition to improving regional connectivity, PIDA’s objective is also to integrate African countries into the global market. Yet, large-scale infrastruc-ture, such as better transit roads or large-scale dams will primarily help heavy mining and extractive industries as well as agribusiness. However, given that these industries are largely dominated by multi-national companies, there is a danger that profits will mostly go overseas instead of contributing to local development (see also Box 2 in this chapter). In the case of large-scale agriculture – often established to grow goods for export to other continents – a vast number of cases of land-grabbing have been reported, especially in sub-Saharan Africa, and local communities have to struggle to sustain their livelihoods.

The focus of building infrastructure for export sectors might also imply that roads are not going to be built where they would be beneficial to the needs of the local markets and the local populations, but rather be designed to connect far-flung exploration areas to ports for the transportation of minerals, oil and gas for export. First examples of this can be seen in the Lamu Gateway Development Project (LAPS-SET).

Box 1: PIDA-PAP-Project LAMU GATEWAY DEVELOPMENT destroys Kenyan nature reserve39

The USD 22 billion project Lamu Port-South-Sudan-Ethiopia Transport (LAPSSET) involves building a road, a rail link and an oil pipeline over 1700 kilometres from South Sudan to the Kenyan coast. To ex-port the oil, the government is also building a deep sea port for USD 3.5 billion, ignoring any environ-mental or social considerations, and a nearby nature reserve with high biodiversity. The locals were nei-ther informed, nor involved in the planning process. Nor were they compensated.

Local organisations demand that the Kenyan government stop this project because it is bad for the envi-ronment, illegal and disproportionate to Kenya’s annual income of USD 6.6 billion. They accuse the AfDB of only having surveyed their part without considering the economic and environmental viability of the project as a whole. Even in a 2010 report on poverty reduction, the World Bank has doubted that a new port would be the solution to East Africa’s growing trade needs.40 With the large port in Mombasa

39 http://www.savelamu.org/issues/lamu-port/ 40 Kenya Economic Update, Poverty Reduction and Economic Management Unit Africa Region, World Bank, page 36 (June 2010),

http://tinyurl.com/7btfbqj

http://www.savelamu.org/issues/lamu-port/


already under-used, the terminal in Lamu could cause the fragmentation of East African shipping, result-ing in one of them making a loss. The World Bank had demanded feasibility studies prior to construc-tion, but that has not happened.

The anti-LAPSSET coalition demands an immediate moratorium. They call for the Kenyan government and the AfDB to conduct a comprehensive cost-benefit analysis for the entire project and the port; to carry out relevant environmental and social assessments and to inform and consult the affected commu-nities and families about the project, and to compensate them.

b) Local economies loose out

Although one might think that large infrastructure projects automatically benefit local economies and the poor, numerous examples from the aid sector have shown that this is not necessarily the case. Even World Bank studies show, that ‘trickle-down effects’ simply do not happen. Profits mostly go overseas, rather than contributing to local development, as the AfDB also confirms in its working paper on gold.41 The paper comes to the conclusion that local economies have to carry the burden of resource extraction, while enjoying little of its benefits:

Box 2: Gold Mining in Africa: Maximising Economic Returns for Countries

“The gold mining industry is consistent with the widely held belief that the industry’s contribution to development is hindered both by its enclave nature and the prevalence of unfair concession agreements signed between governments and foreign mining companies. The capital-intensive nature of mining sug-gests that limited linkages are likely to remain a fact of the industry. However, the variance in the per-formance of resource-rich countries (a category which includes many gold producers) is indicative of the fact that the so-called resource course is not destiny. Specifically, there is ample scope for policymakers to address the prevalence of unfair mining agreements that lead to repatriation of most of the resource rent, leaving local economies carrying the burden of resource extraction while enjoying little of its bene-fits.”42

c) Not benefitting the poor

PIDA documents also fail to mention how exactly the infrastructure projects will benefit the local popu-lation. One example is the agriculture sector: Sub-Sahara Africa is the most targeted region for land-grabbing, which means that land is wrongfully taken away from local populations, often to establish large agribusinesses to grow export crops (food, fibres, palm oil etc.). These activities need large infra-structure such as roads, dams for irrigation or power generation, ports, airports etc., but do not necessari-ly benefit local markets. On the contrary, they often leave behind problems such as soil and water pollu-tion through pesticides and fertilisers, degraded land and loss of biodiversity. This high price is usually paid by the local population as they lose their land and livelihoods and usually suffer badly, instead of being better off after project implementation.

With regards to numerous large-scale energy projects, be it large dams, oil and gas pipelines or coal fired power plants, the poorer populations and directly affected people often lose out. Connecting poor peo-ple to the high-voltage grids is often impossible or too expensive. The poor and especially rural popula-tions need a completely different type of energy supply. It must be affordable and locally produced. Yet, PIDA does not mention alternative energy projects for people living off the grid in rural areas. It is also unclear whether and how options on the type of energy supply had been assessed prior to decision mak-ing.

41 African Development Bank Group, Gold Mining in Africa: Maximising Economic Returns for Countries, Working Paper Series, March 2012

42 Ibid.

© EvB, 2013 23

Unlike the risks of the local people, those of private investors are well covered: The authors of PIDA suggest risk mitigation for investors in infrastructure projects and propose investor-friendly rules and insurances to be implemented as soon as possible43.

d) No effective social and environmental risk management

Large infrastructure projects, such as roads, railway lines, oil pipelines or dams very often entail nega-tive and severe environmental damage and human rights violations. While measures are envisaged for insurance companies to cover private sector risks, no one covers the risks of the affected people or of vulnerable and poor groups, and environmental damage is often neglected. The building of large infra-structure often requires the displacement of affected people, which puts additional pressure on already vulnerable societies. Worldwide, Africa already has the highest number of internally displaced persons (more than 11 million) due to natural disasters and conflicts, but also large-scale projects.44

Although PIDA documents briefly mention respecting social and environmental concerns, there is no reference to which and whether at all safeguard standards will be used. This can create chaotic situa-tions, in particular with regards to inter-regional projects financed by various donors or governments and a race to the bottom to weaken environmental and social standards.

PIDA documents on financing are fully aware of Africa’s problems to struggle with climate change and in particular the impact of extreme water shortages on the environment: “Water needs will push some river basins – including the Nile, Niger, Orange and Volta basins – to the ecological brink45”.

They argue that climate risks can be mitigated through infrastructure projects, such as building large reservoirs for water storage. Already today, many reservoirs and hydropower dams are not full due to lack of water. This is the reason why the Bujagali dam in Uganda does not perform as planned, resulting in reduced energy output.

World-wide experience from other dams near the Equator has shown an increase in salinity, which makes the water unsuitable for irrigation or as drinking water. In addition, fisherfolk and the local popu-lations downstream will be deprived of their livelihoods. Apart from supplying water for cities and in-dustry, a huge part of the water resources ends up in irrigation for large-scale farming. Local farmers are often forbidden from using these resources or usage fees are too high for small farmers.

e) Financial and corruption risks ignored

The costs of PIDA up to 2040 are currently estimated to be more than USD 360 billion. This means PIDA will absorb huge amounts of money. However, as countries in sub-Saharan Africa are figuring among the poorest of the world, with national budgets averaging from 2 to 8 billion US dollars, the promoters of PIDA are fully aware of the financial gaps and suggest a wide variety of measures.

One of these is to tap into development aid. But this proposal completely ignores that aid money is al-ready very tight. Funds used for large infrastructure will be missing in other sectors such as pro-poor energy and water supply. In addition, this proposal ignores that of the large pledges made by the G8 and G20, payments were actually only partly made, and in some cases nothing was paid. Several UN sum-


44 Elizabeth Ferris, Internal Displacement in Africa: An Overview of Trends and Opportunities, Presentation at the Ethiopian Community Development Council, Brookings-LSE Project on Internal Displacement, May 2012



mits on ‘Financing for Development’ aimed to find new sources for financing aid, but mostly failed46. Also, due to a lack of public finance, the Millennium Development Goals cannot be fully implemented in Africa.

There is a great risk that the projects are too ambitious, may never be finished or connected to each oth-er, but would remain in the budgets of many states as debt, which has to be paid back for years.

In addition, large projects always bear the risk of corruption. For private investors or government elites, infrastructure projects are lucrative investment opportunities, yielding high rates of return or profitable building contracts. The pressure of high profits is also a factor in externalising costs (e.g. for compensa-tion, relocation of affected people), which means that problems caused by project implementation re-main unsolved, and often no one feels either responsible or – if so – lacks the political will or the finan-cial resources to make an effort.

Box 3: Examples for corruption in hydropower projects

World Bank debars two Alstom groups and affiliates47: In February 2012 Alstom Hydro France, Alstom Network Schweiz AG of Switzerland and their affiliates have been debarred for a period of three years, which means that they are considered cross-debarred by other multilateral development banks including the African Development Bank (Agreement of Mutual Recognition of Debarments in 2010). Alstom acknowledged misconduct in relation to the World Bank-financed Zambia Power Rehabilitation Project. Alstom made an improper payment of EUR 110.000 to an entity controlled by a former senior govern-ment official for consultancy services in relation to this project. The Negotiated Resolution Agreement between Alstom and the World Bank includes restitutions totalling about USD 9.5 million to be made by the two companies.

Alstom Network Schweiz AG of Switzerland has a long history of bribery, i.e. in Tunisia, Latvia, Malay-sia: On 22 November, 2011, Alstom subsidiary Alstom Network Schweiz AG was condemned by the Office of the Attorney General in Switzerland to paying restitutions of CHF 36.4 million (EUR 30 mil-lion) for bribing state officials in Latvia, Malaysia and Tunisia. The investigation concluded that a num-ber of Alstom’s contractors in these countries had passed on considerable portions of their fees to foreign decision makers, in order to make them look favourably on Alstom’s requests.48

f) Lack of legal framework can jeopardise the entire programme

The authors of the PIDA documents admit that in order to make the programme work, African countries will need to integrate the common framework of regional and continental policies into their own legisla-tion and enforce them. The promoters of PIDA are fully aware that this will be one of the biggest chal-lenges:

“Successfully implementing PIDA also means tackling the soft governance issues necessary for true regional integration—harmonization, facilitation, monitoring, maintenance and peer review—and, when necessary, establishing a legal framework for action through legislation. Regional trade agreements already in place need to be enacted, while regulatory reform should address standards and policies that currently restrict free trade and the flow of goods and services. These actions are

46 United Nations, Millennium Development Goal 8, The Global Partnership for Development at a Critical Juncture, MDG Gap Task Force Report 2010, http://www.un.org/millenniumgoals/pdf/10-43282_MDG_2010%20(E)%20WEBv2.pdf

47 http://www.hydroworld.com/articles/2012/03/world-bank-debars.html 48 http://www.publiceye.ch/de/vote/alstom/

http://www.un.org/millenniumgoals/pdf/10-43282_MDG_2010%20(E)%20WEBv2.pdf

http://www.hydroworld.com/articles/2012/03/world-bank-debars.html

© EvB, 2013 25

urgent and need to move in parallel to physical infrastructure development.”49

The lack of international treaties for the sharing of transboundary waters is also bound to cause severe conflicts when it comes to the building of large dams on transboundary rivers. Considering the high pri-ority that PIDA is giving to ‘unlock’ Africa’s hydropower potential, many downstream countries will have similar concerns as Egypt and Sudan in the case of the Grand Ethiopian Renaissance Dam (formerly called Great Millenium Renaissance Dam) on the Blue Nile. The Executive Summary of PIDA states50:

“The Grand Ethiopian Renaissance Dam (GERD) is under construction in the Abbay Gorge by the Government of Ethiopia (GoE). The GoE is convinced that the Dam has huge benefit to all three ri-parian countries, namely Egypt, Ethiopia and Sudan. Egypt and Sudan have concerns on the im-pacts of the Dam upon them. To that end, GoE has invited in good faith the two downstream coun-tries Egypt and Sudan to form an International Panel of Experts to review the design documents of the GERD, provide transparent information sharing and to solicit understanding of the benefits and costs accrued to the three countries and impacts if any of the GERD on the two downstream coun-tries so as to build trust and confidence among all parties.”

g) Consequences of large dams

The Priority Action Plan (PAP) for the sectors ‘energy’ and ‘transboundary water resources’ mainly relies on large dams to provide energy and water as well as regulation of rivers. However, multipurpose pro-jects have been particularly ineffective investments. Apart uses (irrigation, power production, river regu-lation etc.) competing which each other, large multipurpose dams regularly suffer from overspending. Numerous bad and failed projects around the world, as well as the report of the World Commission on Dams,51 testify to this.

The electricity and water generated usually goes into urban centres, mining, industry, agriculture and other sectors. Those affected by the dams are displaced, often without compensation. They have to face the ecological damage from an altered course of the river and adverse effects on fisheries and agriculture. Climate change will bring further uncertainties: Will it even be possible to fill reservoirs of such a size in the future? Experts doubt it.

Many of the ‘single use’ dams in the PAP for Energy in PIDA are already highly disputed as well:

• The Grand Ethiopian Renaissance Dam (formerly called Grand Millennium Renaissance Dam) on the Blue Nile leads to severe conflicts with downstream countries Egypt and Sudan fearing for their share of the river’s water. (see also section f)

• The Mphanda-Nkuwa dam in Mozambique has been fought by local organisations for many years. They criticise that a big share of the energy will go to South Africa and to an aluminium smelting plant in Mozambique. They doubt that the local population will benefit from the dam52. The river Zambezi already is the river in all of Africa with the most dams. The consequences for humans and animals are most strongly felt in Mozambique, where the huge Cahora Bassa dam is located. A report recently published by International Rivers53 comes to the conclusion that the Zambezi is particularly vulnerable to climate change.

49 African Development Bank, African Union, NEPAD, Programme for Infrastructure Development in Africa. Interconnecting, integrating and transforming a continent; http://www.icafrica.org/fileadmin/documents/PIDA/PIDA%20Executive%20Summary%20-%20English_re.pdf

50 Ibid. 51 Dams and Development, A new Framework for Decision-Making, November 2000,

http://www.internationalrivers.org/resources/dams-and-development-a-new-framework-for-decision-making-3939 52 Campaign against Mphanda Nkuwa; http://justicaambiental.org/index.php/en/campaigns-2/mphanda-nkuwa 53 Dr. Richard Beilfuss, A Risky Climate for Southern African Hydro, International Rivers, September 2012;

http://www.internationalrivers.org/resources/a-risky-climate-for-southern-african-hydro-7673

http://www.icafrica.org/fileadmin/documents/PIDA/PIDA%20Executive%20Summary%20-%20English_re.pdf

http://www.internationalrivers.org/resources/dams-and-development-a-new-framework-for-decision-making-3939


• Inga III: This is part of the Grand Inga hydropower project in the Democratic Republic of Congo

(DRC). Grand Inga is the world’s largest proposed hydropower scheme and is supposed to provide energy to a large part of the African continent. Inga’s displaced communities have been fighting to ob-tain fair compensation since the 1960s, and have received nothing to date. The poor maintenance and financial problems of Inga 1 und 2 raise concerns about the risks of Inga 3.54 The G20 progress report still supports the Inga scheme – among other large dams – and observers of the process are afraid that these projects could be ‘pre-approved’ for public and private financing before even feasibility studies are completed.

• Hydropower components of the Lesotho Highlands Water Project (LHWP) Phase II: The Lesotho High-lands Water Project has several phases in order to supply water to South Africa and power to Lesotho and South Africa (project phase II). Apart from the social conflicts and environmental damage caused by the LWHP, a gigantic corruption scandal was exposed in 199955.

• The Rusumo Falls Dam in Rwanda, Tanzania and Burundi, and Kaleta Dam in Guinea, will all have downstream impacts on biodiversity and livelihoods. The Kaleta Dam is even projected to impact a Ramsar wetlands biodiversity site. It is unclear whether and how environmental flows – which de-scribes the quantity, timing and quality of water flows required to sustain freshwater and estuarine ecosystems and the human livelihoods and wellbeing that depend on these ecosystems – have been planned for. The World Bank is also financing them.56 According to the PIDA document on financing, these dams are all ‘shovel-ready’.57

Large dams are mostly built without public participation – and without assessing the options. All over the globe, civil society has been struggling for decades to stop large dams, because the people affected by them usually lose out. This has been confirmed by the World Commission on Dams58 in its 2000 report and countless additional reports and studies. A recent study of the International Institute for Environ-ment and Development (IIED) looked at – among other issues – the consequences for the people affected by six large dams in West Africa.

Box 4: Sharing the water, sharing the benefits

In 2011, the International Institute for Environment and Development (IIED), UK, published the study Sharing the water, sharing the benefits, in which it draws lessons from six large dams in Burkina Faso, Senegal and Mali, built between the late 1970s and 1990s (partial quote from executive summary):59

Ensuring that local people benefit from the dams does not have to be incompatible with broader national development objectives, nor does it require large sums of money. It does, however, require the political will to implement the following:

• Ensure that local people are involved in the benefits it creates and thus in all of the decisions that are taken with regard to its construction, relocations, compensation, investments, support programmes and so on.

54 http://www.internationalrivers.org/resources/grand-inga-hydroelectric-project-an-overview-3356 55 http://www.internationalrivers.org/resources/lesotho-highlands-water-project-what-went-wrong-4060 56 Zachary Hurwitz, International Rivers, To Lead on Biodiversity, the World Bank Must Champion Environmental Flows, 12

October 2012, http://www.internationalrivers.org/blogs/258/to-lead-on-biodiversity-the-world-bank-must-champion-environmental-flows


58 Dams and Development, A new Framework for Decision-Making, November 2000, http://www.internationalrivers.org/resources/dams-and-development-a-new-framework-for-decision-making-3939

59 IIED, IUCN, IRAM, Global Water Initiative (First Published by IIED), Sharing the water, sharing the benefits. Quotes from the Executive Summary. The studies took place in: Burkina Faso, Senegal and Mali.

http://www.internationalrivers.org/resources/grand-inga-hydroelectric-project-an-overview-3356

http://www.internationalrivers.org/blogs/258/to-lead-on-biodiversity-the-world-bank-must-champion-environmental-flows

http://www.internationalrivers.org/blogs/258/to-lead-on-biodiversity-the-world-bank-must-champion-environmental-flows

http://www.internationalrivers.org/resources/dams-and-development-a-new-framework-for-decision-making-3939

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• Replace compensation policies aimed at reproducing previous living conditions with local develop-ment policies that support local players to adapt to the changes the dam will bring to the region and to benefit from them.

• Promote the development of local production systems by ensuring access to land and natural re-sources through agreements and regulations that are compatible with both positive and customary law.

• Establish local regulations negotiated with and validated by all local stakeholders, thus enabling a fair and sustainable use of the natural resources.

• Encourage fair access to the dam’s benefits for local people by establishing preferential access terms (for example to irrigated plots or electricity, promoting apprenticeships and organisational dynamics that will help local people to adapt, and establishing a local development fund financed by the dam’s own activity.


6 Conclusion

Infrastructure for all?

The Programme for Infrastructure Development in Africa (PIDA) constitutes the first overall scheme for infrastructure planning for the whole of Africa. It consolidates planning that happened in different plac-es and often without proper coordination. This includes coordinating efforts with international donors. The African Development Bank (AfDB) plays a central role here, and also in attracting private investors, providing expertise and implementing many of the PIDA projects. PIDA will certainly stimulate devel-opment, but some questions still remain: Which type of development will be triggered? And who will benefit? A number of the projects agreed upon in PIDA’s Priority Action Plan (PAP) have already been criticised by civil society organisations, because CSOs believe that the local population will not only not benefit, but that in some cases they will pay a very high price and be worse off than before.

PIDA names poverty reduction as a major objective, but fails to mention how regional infrastructure projects that mostly promote greater interconnectivity are supposed to really reduce poverty. The infra-structure needs of most of the poor population – at least in remote areas – are not addressed by PIDA. Small farmers, pastoralists, fisherfolk – many of them from indigenous peoples or other vulnerable groups – need energy and water for their households, for processing food and for selling it to local mar-kets.

NGOs and grassroots movements see energy supply ‘for all’, including the poor and marginalised and those that need off-grid supply, as the key approach to sustainable development. The same applies to providing adequate infrastructure to small farmers or producers of fish, etc. In contrast to PIDA, plan-ning for this would have to happen ‘from the bottom up’, i.e. together with the potential consumers of the energy and water, and the users of transport infrastructure. A number of studies show that energy and water supply is a key factor in the development of rural areas. However, this requires a decentral-ised supply of renewable energy, as demanded by the UN initiative Sustainable Energy for All. Accord-ing to the UN, access to sustainable and clean energy is a major factor in giving the 1.5 billion people without energy a chance for long-term, lasting and sustainable development and to reduce poverty worldwide.

PIDA raises certain questions. Some of the important ones are:

When and how will civil society be involved?

The Programme for Infrastructure Development in Africa (PIDA) and other infrastructure initiatives pre-sented in this paper involve and engage a large number of very diverse stakeholders: the African Union, African countries, United Nations bodies, the Infrastructure Consortium for Africa (ICA), several Euro-pean Union initiatives directed towards Africa, development banks, bilateral development institutions and the private sector – just to name a few. One other important stakeholder has so far not received much attention: civil society. PIDA hardly mentions it, and from the available documents it remains very much unclear how and when civil society will be involved and get to have a say in the programme.

Will there be an options assessment?

Further questions concern an options assessment: Are the projects listed in the Priority Action Plan (PAP) already approved? Will there be an options assessment that does not only consider technical but also development options?

Which safeguards and policies will be applied?

The African Development Bank Group (AfDB) plays a major role in implementing PIDA and other infra-structure initiatives in Africa. Will all PIDA projects therefore be planned, designed and implemented in

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accordance to the newly developed AfDB policies and safeguards? How about projects that might not be implemented by the AfDB?

With actors involved all around the world, PIDA concerns both actors from the South and from the North. Joint efforts are needed to raise awareness of the consequences of the proposed activities and to initiate transparent and inclusive discussions about where publicly financed infrastructure programmes are best applied and who is supposed to benefit from them.


Further Reading

NEPAD, African Union, AfDB, Study on Programme for Infrastructure Development in Africa (PIDA), Phase III, PIDA Study Synthesis, September 2011; http://www.afdb.org/fileadmin/uploads/afdb/Documents/Project-and-Operations/PIDA%20Study%20Synthesis.pdf

African Development Bank, African Union, NEPAD, Programme for Infrastructure Development in Afri-ca. Interconnecting, integrating and transforming a continent; http://www.afdb.org/fileadmin/uploads/afdb/Documents/Project-and-Operations/PIDA%20note%20English%20for%20web%200208.pdf

United Nations Economic and Social Council – Economic Commission for Africa, African Union Com-mission, Financing of the Programme for Infrastructure Development in Africa (PIDA), March 2012

WRI Insights, Denise Leung and Athena Ballesteros, Improved Governance needed in G20’s Report on Infrastructure Development, 5 September, 2012; http://insights.wri.org/news/2012/09/improved-governance-needed-g20s-report-infrastructure-development

Salim Fakir, The G 20’s Energy Infrastructure Plans for Africa: What is missing? Heinrich Böll Stiftung, Southern Africa, June 2012; http://www.g20civil.com/upload/iblock/c62/G20%20Energy%20Infrastructure%20Africa_%20Final.pdf

Peter Bosshard, Infrastructure for Whom? A Critique of the Infrastructure Strategies of the Group of 20 and the World Bank, International Rivers 2012; http://www.internationalrivers.org/resources/infrastructure-for-whom-7454

Nicholas Hildyard, Morde than Bricks and Mortar – Infrastructure as Asset Class: A Critical Look at Private Equity Infrastructure Funds, The Cornerhouse, September 2012;

http://www.thecornerhouse.org.uk/resource/more-bricks-and-mortar









http://www.thecornerhouse.org.uk/resource/more-bricks-and-mortar

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Further Information

CSO Coalition on the African Development Bank

www.coalitionafdb.org

The CSO Coalition on the African Development Bank is an African-led network of civil society organisa-tions that advocates greater accountability, transparency and sustainability in the operations of the Afri-can Development Bank (AfDB) and the projects that it finances. The Coalition seeks transparency from the AfDB, information about projects and a consultation process that includes CSOs. Among other is-sues, the Coalition supports cleaner energy options that are also responsive to the needs of the poor, and is committed to advocating a stand-alone policy that protects indigenous peoples and their rights.The Coalition is funded by private foundations, and is not affiliated with or funded by the AfDB.

Bank Information Center – BIC

www.bicusa.org

The Bank Information Center (BIC) is an independent, non-profit, non-governmental organisation that aims to empower citizens in developing countries to influence activities of the World Bank and other Multilateral Development Banks (MDBs) in a manner that fosters social justice and ecological sustaina-bility. BIC advocates greater citizen participation, transparency and public accountability.

JVE International

www.jve-international.org

JVE concentrates its activities around three main areas: Energy-Climate-Development, which mainly focuses on the utilisation of improved stoves and solar energy systems: Natural Resources Management, focusing on forest and land management, access to safe drinking water and sanitation; and Citizen’s En-gagement, in which ecological conscience and social justice are achieved through promoting volunteer-ing, environmental classes, radio & TV programmes, monitoring of international financial flows (mainly public money) and empowerment of vulnerable communities especially those affected by development projects and multinational companies’ activities.

International Rivers

www.internationalrivers.org

Since 1985, International Rivers has been at the heart of the global struggle to protect rivers and the rights of communities that depend on them. International Rivers works with an international network of dam-affected people, grassroots organisations, environmentalists, human rights advocates and others who are committed to stopping destructive river projects and promoting better options.

Other Official Websites

African Development Bank Group: www.afdb.org

Infrastructure Consortium for Africa: www.icafrica.org

Africa-Infrastructure Trust Fund: www.eu-africa-infrastructure-tf.net

PIDA: www.pidafrica.org

http://www.coalitionafdb.org/

http://www.afdb.org/

http://www.eu-africa-infrastructure-tf.net/

http://www.pidafrica.org/


Annex 1: Executive Directors of the African Development Bank (31 January 2013)

NAME CONSTITUENCY 1 Mr. Abdelhak BENALLEGUE Algeria, Guinea Bissau, Madagascar 2 Mr. François KRUGER France, Belgium, Spain 3 Mr. Mohit DHOORUNDHUR Mauritius, Botswana, Malawi, Zambia 4 Dr. Abdul-Magid GADAD Libya, Mauritania, Somalia 5 Mr. Walter C. JONES United States of America 6 Mr. Masahiro KAN Japan, Argentina, Austria, Brazil, Saudi Arabia 7 Mr. Elfatih Mohamed KHALID Sudan, Gambia, Ghana, Liberia, Sierra Leone 8 Mr. Shahid KHAN South Africa, Lesotho, Swaziland 9 Mr. Mohamed S. S. ZAGHLOUL Egypt, Djibouti 10 Mr. Christoph KOHLMEYER Germany, Portugal, Switzerland 11 Mr. Mohamed MAHROUG Morocco, Togo, Tunisia 12 Mr. Hau Sing TSE Canada, China, Kuwait, Republic of Korea 13 Mrs. Mary Consolate MUDUULI Uganda, Eritrea, Ethiopia, Kenya, Rwanda,

Seychelles, Tanzania 14 Mr. Amadou KONE Côte D'Ivoire, Equatorial Guinea, Guinea 15 Mr. Emmanuel NGOY-THA Central African Republic, Burundi, Cameroon,

Congo, Democratic Republic of Congo 16 Ms. Margit THOMSEN Denmark, Finland, India, Norway, Sweden 17 Mr. Pedro M.F. TOMBWELE Angola, Mozambique, Namibia, Zimbabwe 18 Mr. Mamadou Abdoulaye SOW Senegal, Benin, Burkina Faso, Cape Verde, Chad,

Comoros, Gabon, Mali, Niger 19 Dr. Shehu YAHAYA Nigeria, Sao Tome & Principe 20 Mr. Vincenzo ZEZZA Italy, Netherlands (The), United Kingdom

Source: http://www.afdb.org/fileadmin/uploads/afdb/Documents/Boards-Documents/AfDB%20Statement%20of%20Voting%20Power%20as%20at%2031%20January%202013.pdf

programme for infrastructure development in africa (pida) adn the african development bank (afdb)

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