World Bank President Jim Yong Kim attends the Fragility Forum this month… (Michael Reynolds/European…)
The World Bank is making a major push to develop large-scale hydropower projects around the globe, something it had all but abandoned a decade ago but now sees as crucial to resolving the tension between economic development and the drive to tame carbon use.
Major hydropower projects in Congo, Zambia, Nepal and elsewhere — all of a scale dubbed “transformational” to the regions involved — are a focus of the bank’s fundraising drive among wealthy nations. Bank lending for hydropower has scaled up steadily in recent years, and officials expect the trend to continue amid a worldwide boom in water-fueled electricity.
Such projects were shunned in the 1990s, in part because they can be disruptive to communities and ecosystems. But the World Bank is opening the taps for dams, transmission lines and related infrastructure as its president, Jim Yong Kim, tries to resolve a quandary at the bank’s core: how to eliminate poverty while adding as little as possible to carbon emissions.
“Large hydro is a very big part of the solution for Africa and South Asia and Southeast Asia. . . . I fundamentally believe we have to be involved,” said Rachel Kyte, the bank’s vice president for sustainable development and an influential voice among Kim’s top staff members. The earlier move out of hydro “was the wrong message. . . . That was then. This is now. We are back.”
It is a controversial stand. The bank backed out of large-scale hydropower because of the steep trade-offs involved. Big dams produce lots of cheap, clean electricity, but they often uproot villages in dam-flooded areas and destroy the livelihoods of the people the institution is supposed to help. A 2009 World Bank review of hydropower noted the “overwhelming environmental and social risks” that had to be addressed but also concluded that Africa and Asia’s vast and largely undeveloped hydropower potential was key to providing dependable electricity to the hundreds of millions of people who remain without it.
“What’s the one issue that’s holding back development in the poorest countries? It’s energy. There’s just no question,” Kim said in an interview.
Advocacy groups remain skeptical, arguing that large projects, such as Congo’s long-debated network of dams around Inga Falls, may be of more benefit to mining companies or industries in neighboring countries than poor communities.
“It is the old idea of a silver bullet that can modernize whole economies,” said Peter Bosshard, policy director of International Rivers, a group that has organized opposition to the bank’s evolving hydro policy and argued for smaller projects designed around communities rather than mega-dams meant to export power throughout a region.
“Turning back to hydro is being anything but a progressive climate bank,” said Justin Guay, a Sierra Club spokesman on climate and energy issues. “There needs to be a clear shift from large, centralized projects.”
The major nations that support the World Bank, however, have been pushing it to identify such projects — complex undertakings that might happen only if an international organization is involved in sorting out the financing, overseeing the performance and navigating the politics.
The move toward big hydro comes amid Kim’s stark warning that global warming will leave the next generation with an “unrecognizable planet.” That dire prediction, however, has left him struggling to determine how best to respond and frustrated by some of the bank’s inherent limitations.
In his speeches, Kim talks passionately about the bank’s ability to “catalyze” and “leverage” the world to action by mobilizing money and ideas, and he says he is hunting for ideas “equal to the challenge” of curbing carbon use. He has criticized the “small bore” thinking that he says has hobbled progress on the issue.
However, the bank remains in the business of financing traditional fossil-fuel plants, including those that use the dirtiest form of coal, as well as cleaner but carbon-based natural gas infrastructures.
Among the projects likely to cross Kim’s desk in coming months, for example, is a 600-megawatt power plant in Kosovo that would be fired by lignite coal, the bottom of the barrel when it comes to carbon emissions.
The plant has strong backing from the United States, the World Bank’s major shareholder. It also meshes with one of the bank’s other long-standing imperatives: Give countries what they ask for. The institution has 188 members to keep happy and can go only so far in trying to impose its judgment over that of local officials. Kim, who in his younger days demonstrated against World Bank-enforced “orthodoxy” in economic policy, now may be hard-pressed to enforce an energy orthodoxy of his own.