Tight rules for lending by African bank start

By: IMMACULATE KARAMBU

The African Development Bank (AfDB) has revised its environmental and social assessment procedures to allow close scrutiny of projects seeking funding.

On Tuesday, AfDB said the new guidelines would also seal loopholes in the existing rules adopted in 2001.

Under the revised procedures, large public sector projects are required to be disclosed for at least 120 days to allow the public to react to proposals on their implementation.

Private projects must be disclosed for at least 60 days. This is a shift from the current practice where the National Environment Management Authority (Nema) requires proponents of projects to disclose them for at least 30 days for reaction from the public.

“The environmental and social assessment procedures (Esap) will help improve decision making and project results by ensuring that bank-financed operations conform to the requirements laid out in the operational safeguards and are thus sustainable,” said AfDB in a statement.

The new guidelines will apply only to projects seeking AfDB funding, hence they will not affect Nema’s procedures.

EFFICIENT PROJET MANAGEMENT

AfDB says the new assessment guidelines will eliminate delays in implementation of projects as they will allow adoption of remedial measures at the initial stages.

“Esap represents a coordination mechanism between the bank, relevant government agencies and private sector entities and plays an important role in building the environmental, social and climate change management capacity of the project’s executing agency,” said AfDB.

Lack of proper preparation of projects is the main reason African states have failed to tap foreign funding for key projects, according to participants at an infrastructure workshop organised by AfDB that closed on Thursday.

It is estimated that Africa suffers an annual infrastructure funding deficit of up to $Sh9.7 trillion ($95 billion), compromising growth.

AfDB, World Bank, French Development Agency and Japan International Co-operation Agency, among other bilateral lenders, are behind most infrastructure projects in Africa.

Last month, the World Bank faulted the Kenya Electricity Generating Company (KenGen) on the manner it carried out resettlement of members of the Maasai community to give room to the 280 megawatts geothermal power plant in Olkaria.

The Olkaria project is financed partly by the World Bank, through a loan from the International Development Association (IDA) to the tune of Sh33.7 billion ($330 million).

The World Bank said KenGen did not comply with policies on indigenous people’s involuntary resettlement and that the resettlement process was not adequately supervised by the bank.

“The panel recognises the many positive aspects of this resettlement, but our investigation also confirmed that some of the most vulnerable people experienced harm during the process. We expect that redress will be provided to the affected community through the proposed way forward,” said Mr Gonzalo Castro de la Mata, chairman of the inspection panel investigating the Kenya Electricity Expansion Project where the geothermal plant falls.

SOURCE: DAILY NATION