Letter to Dongfang Electric Corporation and the Gibe 3 Project

Monday, September 27, 2010

Mr. Luo Zhigang
Dongfang Electric Corporation
333 Shuhan Avenue, Chengdu,
Sichuan Province 610036 China

September 27, 2010

Dongfang Electric Corporation and the Gibe 3 Project

Dear Mr. Luo,

On May 12 you, on behalf of Dongfang Electric Corporation, signed an agreement with the Ethiopian Electric Power Corporation (EEPCo) to provide the hydro-mechanical and electro mechanical component of the Gibe 3 Dam project. We recently learned that the Industrial and Construction Bank of China (ICBC) in July approved funding to finance DEC's contract.

DEC is seeking to build its international reputation in green renewable energy projects and holds its social responsibility as a "sacred mission". DEC says that it is committed to environmental protection, ecologically sound development, and to contributing to the development and progress of human society. Given DEC's corporate social and environmental commitments, we would like to inform you about the concerns that Friends of Lake Turkana and International Rivers have about the Gibe 3 Dam. We have shared our concerns with ICBC through letters dated May 21 and September 17, 2010.

The Gibe 3 Dam will have devastating social and environmental impacts on the Lower Omo Valley and Kenya's Lake Turkana. We expect that the dam will reduce food security and intensify resource conflicts amongst half a million people dependent on the downstream water flows. The project is in violation of Ethiopian laws and regulations on environmental impact assessment and procurement. Official project studies lack rigorous scientific analysis and ignore significant sources of water loss, impacts on Lake Turkana, and risks of increased conflict. Independent assessments of the project by the African Resources Working Group, USAID, Dr. Sean Avery (prepared for the African Development Bank) and Sogreah Consultants (prepared for the European Investment Bank) substantially confirm our concerns. As the independent reports emphasized, these concerns have not been addressed by the project developer in any credible way. We would be happy to send you the reports mentioned above upon request.

International Rivers appreciates DEC's commitment to be a socially responsible global corporate citizen. Given these commitments we are extremely disappointed that DEC has agreed to participate in a project that violates host country laws and is clearly not in line with international, social and environmental standards. DEC's participation in the Gibe 3 Dam project puts a question mark behind the corporation's aspiration to become a leading global actor in the sector of sustainable energy development. For all these reasons, we urge DEC to cancel its contract with EEPCo.

Thank you for your attention. We would be happy to send you further documents about the expected impacts of the Gibe 3 Dam, and to answer any questions you may have.

Sincerely yours,

Peter Bosshard, PhD
Policy Director
International Rivers
2150 Allston Way, Suite 300
Berkeley, CA 94704, USA

Ph +1 510 848 1155
Fax +1 510 848 1008
E-mail peter@internationalrivers.org