Dibamba Power Development Corporation (MIGA-12218)

Countries
  • Cameroon
Where the impacts of the investment may be experienced.
Financial Institutions
  • Multilateral Investment Guarantee Agency (MIGA)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Project Status
Approved
Bank Risk Rating
B
Risk rating varies among banks and may refer only to the particular investment and not to the risk for the project as a whole. Projects marked 'U' have an 'Unknown' risk rating at the time of disclosure.
Voting Date
Apr 22, 2014
The estimate day the bank will vote on a proposed investment. The decision dates may change, so review updated project documents or contact the EWS team.
Borrower
Actis Energy Generation Holdings N.V.
The holder of the loan, grant, or other investment.
Sectors
  • Energy
The service or industry focus of the investment. A project can have several sectors.
Potential Rights Impacts
  • Cultural Rights
  • Healthy Environment
  • Housing & Property
  • Indigenous Peoples
  • Labor & Livelihood
  • Right to Food
  • Right to Health
  • Right to Water
Only for projects receiving a detailed analysis, a broad category of human and environmental rights and frequently at-risk populations.
Investment Type(s)
Guarantee
The categories of the bank investment: loan, grant, etc.
Investment Amount (USD)
$ 36.40 million
Value listed on project documents at time of disclosure. If necessary, converted to USD$. Please review updated project documents for more information.
Primary Source

Original disclosure @ MIGA website

Updated in EWS Feb 22, 2018

Disclosed by Bank Feb 20, 2014


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Project Description

The Project considered by MIGA comprises Globaleq Africa's acquisition and expansion of the two Independent Power Producer projects, namely, 1) the Kribi gas fired project owned by the Kribi Power Development Company (MIGA # 12242) and 2) the Dibamba HFO fired project (MIGA # 12218), owned by the Dibamba Power Development Company. Both Projects will be owned by AES Coporation and the Government of Cameroon through the subsidiaries Kribi Power Development Company and Dibamba Power Development Company. The electricity produced will be delivered to the Southern Interconnected Grid and will be disbursed through AES Sonel. The Kribi and Dibamba Projects mark the first independent Power Projects (i.e. privately financed) in Cameroon, which may pave the way for new investment in the power sector.

Early Warning System Project Analysis

RISK CATEGORIZATIONS:

The Dibamba Project, unlike its sister Kribi Project, is categorized as Category B under MIGA's Policy on Environmental and Social Sustainability (2013). MIGA states that potential environmental and social impacts and risks associated with the Dibamba Project include energy use and greenhouse gas emissions, pollution associated with thermal power plants (e.g. air emissions, water supply and effluent, noise, hazardous and non-hazardous waste) and risks related to occupational and community health and safety. The IFC had also categorized the Dibamba Operation as Category B.

Dibamba Project:
PS 1: Assessment and Management of Environmental and Social Risks and Impacts
PS 2: Labor and Working Conditions
PS 3: Resource Efficiency and Pollution Prevention
PS 4: Community Health, Safety and Security
PS 5: Land Acquisition and Involuntary Resettlement
PS 7: Indigenous People
PS 8: Cultural Heritage

***Note: The Dibamba Project is being undertaken at the same time as its sister project, Kribi (MIGA # 12242). For purposes of this assessment, the Dibamba Power Operations are analyzed separately from the Kribi Power Operations. As the current project financing relates to the acquisition and expansion of the operations, environmental impact assessments were analyzed primarily with regards to their operational impacts. To the extent that the acquisition or expansion may exacerbate impacts primarily associated with the initial construction of the plants, those specific impacts are included in the analysis.

People Affected By This Project

DIBAMBA OPERATION

LABOR RIGHTS

MIGA documentation states that Dibamba will provide employment for 73 employees. Similar to the Kribi project, the main health and safety risks associated with labor are the are explosion risks, road accidents, unauthorized access to site and public safety risks associated with transmission lines. Additionally, the plant is guarded by security forces. MIGA maintains that the guards are trained in the adequate use of force, appropriate conduct toward workers and affected communities and human rights considerations," and will "ensure that security personnel abide by the requirements of PS 4."

The following questions may be relevant to determining whether you or your community's labor rights have been violated due to the Dibamba operation:

  • Can all members of your community apply for jobs in the context of the investment project?
  • Are your wages sufficient to meet your basic needs and those of your family?
  • Are your working conditions safe and healthy?
  • What opportunities (legal or other) are available if you consider that your working conditions are not just and favorable?

RIGHT TO FOOD

In Cameroon, agriculture is the basis for 70% of the population's livelihood. Project documentation states that the project area is characterized by moderate to severe poverty, therefore many people in the area lived by subsistence farming or informal sporadic roadside business activities. Loss of agriculture land associated with the construction or operation of the Dibamba project may therefore result in long-term effects on the livelihoods and subsistence of previous land users.

The following questions may be relevant to determining whether you or your community has suffered a violation of your right to food as a result of the Dibamba operation:

  • Has your ability to subsist on your own land been affected since the beginning of the investment project?
  • Has your access to good and affordable food in sufficient quantity been affected since the beginning of the investment project?
  • What opportunities (legal or other) are available if you feel that your right to food has been affected?

RIGHT TO WATER

The Dibamba environmental and social impact assess states that the potential impact upon groundwater resources, both in terms of resource availability and quality, is greater than that on surface water. This is largely due to the absence of any local surface water receptor which could easily be linked to the power plant development. The environmental and social impact assessment notes that potable water will not be available locally during construction and must be brought in by tanker. Further, there is likely to be a groundwater resource (aquifer) of some size directly beneath the site that local users directly rely on for drinking water. As discussed in the Kribi analysis, any spills or leakage from heavy fuel oil may result in contamination of the groundwater, thereby jeopardizing a major water source for local communities.

The following questions may be relevant to determining whether you or your community has suffered a violation of your right to water as a result of the Dibamba operation:

  • Has your access to good and affordable water in sufficient quantity been affected since the beginning of the investment project?
  • Does the company have a policy or programme to ensure that its activities do not affect people's right to water?
  • What opportunities (legal or other) are available if you feel that your right to water has been affected?

RIGHT TO HEALTH

As discussed with regards to the Kribi operation, gaseous emissions from power plants using diesel fuel include carbon dioxide (CO2 ), oxides of nitrogen (NOx), SO2 , and particulate matter, a proportion of which will be PM10 (likely responsible for adverse health effects because of their ability to reach the lower regions of the respiratory tract). Small levels of NOx can cause nausea, irritated eyes and/or nose, fluid forming in lungs and shortness of breath. Breathing in high levels of NOx can lead to: rapid, burning spasms; swelling of throat; reduced oxygen intake; a larger buildup of fluids in lungs and/or death. NOx, plus other gound-level ozone, can cause other major respiratory problems in high levels. It can also react with aerosols from aerosols cans and also cause respiratory problems. Furthermore, NOx can cause visual impairment in the area affects by NOx.

The Dibamba operation also contains a potential risk related to electric and magnetic fields. Project documentation notes that electric and magnetic fields are present wherever electricity is used. The environmental and social impact assessment states that, "for the last twenty years it has been widely debated if these fields are damaging to human health. As a result, international organizations such as the International Commission on Non-Ionising Radiation Protection (ICNIRP) and independent states have set guidelines on exposure limits on EMFs to minimize the potential for shocks and interference with the body's nervous system." The Dibamba environmental and social impact assessment states that while there are no specific, physical mitigation measures proposed to offset potential impacts from EMF effects, EMF levels will be within recognised international limits below or close to the limit set by international standards.

Residents near the project are likely to have similar access to potable water and sanitation as described in the Kribi analysis, making water borne diseases a major factor in the health of villages along the transmission line route and at the plant site. The most prevalent diseases in the area are malaria and diarrhea. The Dibamba environmental and social impact assessment states that the key potential impact of the project on the social infrastructure is pressure on health services. Any potential health impacts of Dibamba's operations may place additional stress on an already fragile health service system.

The following questions may be relevant to determining whether you or your community has suffered a violation of your right to health as a result of the Dibamba operation:

  • Has your health been affected since the beginning of the investment project?
  • Have you experienced an increase in either respiratory or water based-illness?
  • Has your access to good, affordable and acceptable health services been affected since the beginning of the investment project?
  • What opportunities (legal or other) are available if you feel that your right to health has been affected?

RIGHT TO A HEALTHY ENVIRONMENT

During the operational phase, the main potential impact identified by the Dibamba environmental and social impact assessment is associated with emissions from the power plant. The plant will burn heavy fuel oil (HFO) as its main source. Significant emissions will consist of nitric oxide which would be converted to nitric dioxide as the plumes disperse downward. Nitric dioxide helps form acid rain, contributes to global warming, hampers the growth of plants, and can form with other pollutants to form toxic chemicals. Emissions of carbon dioxide (CO2 ), oxides of nitrogen (NOx), SO2, and particulate matter, a proportion of which will be PM10 (likely responsible for adverse health effects because of their ability to reach the lower regions of the respiratory tract), will also result from the combustion of fuel within the gas engines. The particulate matter emitted to atmosphere may include small quantities of trace metals. The emission of unburned hydrocarbons and nitric oxide may also contribute to the formation of ground level ozone.

Additionally, the Dibamba environmental and social impact statement states that potential environmental impacts of Dibamba construction and operation include "permanent loss of existing habitats and related biodiversity due to land clearance for construction; loss or alteration of habitat types due to clearance for the transmission line way leave; habitat severance due to clearance of the 30m wayleave; and disturbance of wildlife and potential increase in road kills due to project construction and operation activities." Management of the wayleave for the power line will likely require the cutting of vegetation on a regular and consistent basis. Similar to the Kribi operation above, removing woodland areas creates the potential for the altering the physical characteristics of the river basis. Additionally, "heavily forested areas have large canopy storage capacities, trees increase soil moisture deficits within soils so enhancing absorption of rainwater, and the root and ground flora systems provide soil cover and help to stabilize and protect soils. Removal of tree cover can greatly increase run-off rates and therefore flow characteristics in streams." Even following decommissioning, soils will likely be in a relatively poor state and therefore the site is likely to be returned to a forest cover.

With regard to soil, there is existing contamination associated with the soap factory to the north. Documentation indicates that the largest risk involves bulk storage of heavy fuel oil, light fuel oil, and transferring and processing of fuel-oil at the power station during operation. However, secondary impacts may arise from the disturbance of soils and vegetation, leading to erosion. Further, any spillage of oils and other potentially polluting substances during construction and operation may also lead to ground contamination, which would exacerbate the already contaminated soil conditions.

Additionally, there are potential environmental impacts stemming from vegetation waste from site clearance; spoil from preliminary construction work, including site levelling, landscaping, backfilling; construction wastes, excess materials, temporary structures and staff wastes (domestic and sewage); wastes arising during operation - mainly in the form of "sludge and water from oily water treatment, water from the site drainage system; domestic waste; sewage waste; and commercial office wastes; vegetation from wayleave management; and decommissioning wastes that may cause soil, surface water, or groundwater contamination." The National Oceanic and Atmospheric Administration recognizes that "in terms of toxicity to water-column organisms, diesel is considered to be one of the most acutely toxic oil types. Fish, invertebrates, and seaweed that come in direct contact with a diesel spill may be killed. Fish kills have been reported for small spills in confined, shallow water."

The following questions may be relevant to determining whether you or your community has suffered a violation of your right to a healthy environment as a result of the Dibamba operation:

  • Has the company provided information to you regarding the disposal of solid waste, hazardous waste, and other waste products, and what impact is this likely to have on the local environment?
  • Has the company informed you of environmental action plan in place for mitigating adverse ecological effects on local communities?
  • What options do you have (legal or otherwise) if the environmental impacts of the proposed operations become a problem for local communities and/or the local ecosystem?

RIGHT TO PROPERTY AND ADEQUATE HOUSING

MIGA notes that initial construction of the Dibamba plant and transmission lines involved "the resettlement of 54 crop fields (belonging to 47 individuals), 3 Buildings (one place of residence, one property under construction and one disused timber storage facility) and 25 titled lands (12 belonging to 10 individuals and 13 belonging to 6 companies/associations)." With this requisition of land the Dibamba environmental and social impact assessment highlighted potential impacts involving resettlement; conflict with host populations; and loss of cultural property. In addition, documentation states the project will also potentially be affected by in-migration. The Environmental and Social Impact Assessment states that "in-migration will primarily be in the construction phase when there will be a maximum of 480 employees required of which approximately ten percent are expected to be sourced locally. Impacts may be STIs HIV/AIDs etc." Although the environmental and social impact assessment states that negative impacts should be minimized by "sensitisation of the local communities and contract workers about safe sex and general behaviour," it notes that "this short-term influx of up to 480 people is assessed as adverse and significant."

During initial construction, MIGA notes that "homes (households) and crop owners (land use) were compensated through the implementation of a comprehensive Resettlement Action Plan (RAP) that required land ownership within the area to be verified," in order to ensure that compensation payments were adequate and satisfactory and that the rightful owners and users of land were compensated. However, the issues of legal land titles and disputes over the legality of land ownership is a significant issue in the project area due to difficulties obtaining land title in Cameroon.

As the affected population's livelihoods are largely land-based, MIGA recognizes project may have a considerable effect on people's livelihoods and community. Project documentation notes that "there are currently no national Cameroonian guidelines for permissible land uses within the way leave. The entire agricultural activity within the wayleave will be lost with the consequential impacts on livelihoods and household incomes, including those resulting from relocation. Any dissatisfaction between the company and resettled communities that was initiated prior to and during the construction phase has the potential to continue into the operational [and expansion] phase of the project."

The following questions may be relevant to determining whether you or your community has suffered a violation of your right to property as a result of the Dibamba operation:

  • Have you and your community had an opportunity to input on resettlement plans and provide suggestions about alternatives to relocation to the company?
  • Has the land and/or housing provided following relocation been adequate and of an equal or better quality than the land and/or housing previously occupied?
  • If you were resettled, did you receive adequate compensation for your land, housing, or crops?
  • Do you have an adequate means of redress at your disposal in the event that you feel that your right to property or adequate housing has been compromised?

RIGHTS OF INDIGENOUS PEOPLES

MIGA documentation states that, for the Dibamba Operations, "while there are Bakola people living in the general region of the Project, none are affected, thus PS 7 does not apply." However in the event that the environmental and social impacts described above are larger than expected, there may be potential impacts on the rights of indigenous peoples living in the vicinity. Additionally, if there are any unsettled problems regarding the resettlement action plan governing indigenous resettlement, the expansion of transmission lines may heighten tensions.

The following questions may be relevant to determining if your indigenous rights are being violated as a result of the Dibamba operation:

  • Have you been discriminated against as an indigenous community?
  • Has the project interfered with your ability to maintain your political, economic and social structures in accordance with your cultures, spiritual traditions, histories and philosophies?
  • Have you been able to participate in decision making regarding the the development and sustainable management of your environment?
  • If relocated, was this after you had given your free, prior, and informed consent to be resettled- Were you given adequate compensation as part of the resettlement action plan for the project?
  • If you feel that your indigenous rights were violated, what options (legal and otherwise) do you have available to you?

RIGHTS TO CULTURE

Project documentation notes that the environmental and social assessment "survey identified three zones containing archaeological remains dating from the prehistoric period. In particular, the presence of ceramics buried up to 1.50 m below ground level may indicate an early settlement buried at the site.[...] In order to confirm the presence or absence of deposits of regional or higher archaeological value, further monitoring surveys should be undertaken to confirm the presence of such deposits."

The following questions may be relevant to determining whether you or your community's right to culture has been violated as a result of the Dibamba Project's construction or operation:
The following questions may be relevant to determining whether you or your community's right to culture has been violated as a result of the Kribi operation:

  • Were you informed and asked to provide input prior to the destruction of any valuable cultural heritage sites or relics for construction of the project?
  • Has your access to cultural institutions been affected since the beginning of the investment project?
  • Has your ability to maintain and use your traditional customs been affected since the beginning of the investment project?
  • What opportunities (legal or other) are available if you feel that your right to take part in cultural life has been restricted or denied?
  • Has your community has been discriminated against because of its culture?
Investment Description
  • Multilateral Investment Guarantee Agency (MIGA)

For non-payment of an award, MIGA would pay the investor's interest in the award. For denial of recourse, MIGA would pay the investor's interest in the amount which, according to MIGA's claims determination, the host government would have to pay to the investor pursuant to the contract. In either case, MIGA's compensation would be capped by the amount of guarantee stated in the guarantee contract.

Private Actors

Actis Energy Generation Holdins N.V. of the Netherlands plans to acquire the assets of AES in Cameroon, and will assume AES' responsibilities for the Kribi and Dibamba projects using its wholly owned subsidiary, Globeleq Africa Holdings (GA). Globaleq Africa is a subsidiary of Globeleq Generation Limited, which was launched in 2002. Over its history Globeleq has owned an interest in and/or operated multiple power facilities with a total capacity of over 4,000 MW of generation capacity in more than 25 countries. Both the Kribi Power Development Company and the Dibamba Power Development Company are owned 56% by Actis, and 44% by the Government of Cameroon. AES Sonel, of which, AES is a 56% shareholder, is the sole off-taker of electricity produced by both Operations.

PAST HUMAN RIGHTS ABUSES:

*** No existing complaints have been found against Globaleq Africa or Actis Energy Generation Holdings***

However, lawsuits have been brought against AES Sonel, the sole electric utility provider in Cameroon, in the Federal District Court of Los Angeles, CA, USA, under the Alien Tort Statute alleging many causes of actions, including wrongful death, loss of consortium, cruel, inhumane or degrading treatment, breach of third party contract, intentional infliction of emotional distress, negligent infliction of emotional distress, negligence, civil conspiracy, and deceptive and unfair business practices. The claims arises from power outages have been blamed for the deaths of at least nine children and infants in Cameroon in 2013. The number of deaths and injuries related to power outages is estimated to be in the hundreds since AES assumed control of electrical supply in Cameroon. The National Commission on Human Rights and Freedoms in Cameroon received complaints against AES-Sonel and the Cameroon Development Corporation (CDC) in cases relating to the initial set up or the expansion of the corporations. In addition, in August of 2011, a Cameroonian citizen submitted a specific instance filing to the United Kingdom OECD National Contact Point, alleging that he, an employee of AES Sonel, suffered salary discrimination based on his race, violating the OECD Guidelines for Multinational Enterprises.

Contact Information

Actis has yet to establish an office in Cameroon.

Inquiries can be directed to:

Alex Douglas
Director, Business Development
Globeleq Advisors Limited
2 More London Riverside, SE1 2JT
United Kingdom
Telephone: +44 20 7234 5401

ACCOUNTABILITY MECHANISM OF MIGA

The Compliance Advisor Ombudsman (CAO) is the independent complaint mechanism and fact-finding body for people who believe they are likely to be, or have been, adversely affected by an IFC or MIGA- financed project. If you submit a complaint to the CAO, they may assist you in resolving a dispute with the company and/or investigate to assess whether the IFC is following its own policies and procedures for preventing harm to people or the environment. If you want to submit a complaint electronically, you can email the CAO at CAO@worldbankgroup.org. You can learn more about the CAO and how to file a complaint at http://www.cao-ombudsman.org/