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dam-l WBank Approves LHWP loan/LS
>Business Day
>05 June 1998
>
> World Bank gives
> green light to water
> project loan
>
> Simon Barber
>
> WASHINGTON - The World Bank's executive board
> approved a $45m loan last night for the second phase of
> the Lesotho Highlands water project despite complaints
> from SA civic organisations that the extra water it would
> deliver to Gauteng could be obtained more cheaply
> through the improved management of existing supplies.
>
> Earlier, the European Investment Bank, the long-term
> finance arm of the European Union, announced a $110m
> package for the project, which is expected to cost
> $1,1bn by the time it is completed in 2003.
>
> The World Bank loan will pay for supervising
> construction and ensuring that environmental and social
> dislocations are kept to a minimum.
>
> The bulk of the financing, $825m, will be raised in rands
> on SA capital and money markets, and from water users.
> The Development Bank of Southern Africa is putting up
> $45m and Lesotho's government $25m. Another $70m
> will be garnered through foreign commercial loans,
> mostly backed by official export credits.
>
> The World Bank's inspection panel - a kind of
> ombudsman - has agreed to look at a complaint lodged
> by anonymous members of Gauteng civic organisations
> who fear that going ahead with the project now will lead
> to unnecessary hikes in water rates as costs are passed
> through to consumers.
>
> The panel has given World Bank management until June
> 16 to present its rebuttal, and will then have three weeks
> to draw up recommendations for the full board.
>
> World Bank country director for SA and Lesotho
> Pamela Cox called the project "the lowest cost
> alternative for water supply to Gauteng province" as well
> as being "a major source of development for Lesotho".
>
> Josey Ballenger reports that one of the claimants said he
> was "not surprised" by the board's decision to approve
> the loan.
>
> He said it was "in the nature of the World Bank to
> approve loans that are not in the interest of communities
> affected. But we also expect the inspection panel to go
> ahead with (investigating) the claim because we do not
> have to accept the (water tariff) increases that will follow
> from the Lesotho Highlands water project."
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Lori Pottinger, Director, Southern Africa Program,
and Editor, World Rivers Review
International Rivers Network
1847 Berkeley Way, Berkeley, California 94703, USA
Tel. (510) 848 1155 Fax (510) 848 1008
http://www.irn.org
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