ADB under pressure over dam loan

16 October 2014

Environmental and human rights groups from Malaysia and around the world have written to the Asian Development Bank (ADB) asking it to shelve a proposed loan supporting the construction of a power grid in Sarawak.

The ADB has proposed lending up to $45 million to Sarawak Energy Bhd, which is building the Trans Borneo Power Grid. Some 40 organisations, including International Rivers, Save Rivers and Jalong of Jaringan Orang Asal SeMalaysia (National Indigenous Peoples' Network of Malaysia), are warning the bank of the reputational and financial risks associated with the loan.

The Trans Borneo Power Grid will export energy from planned hydropower plants in Sarawak to the Indonesian side of Borneo. In their letter the lobby groups say that the ADB should not invest in Sarawak Energy because it has been accused of corruption, irresponsible project management practices and human rights violations.

Sarawak Energy, backed by the Sarawak government, plans to complete the construction of ten dams by 2020, including the 1200 MW Baram Dam. Environmental and indigenous groups are concerned about the impact of these projects on the land and their livelihoods.

"The rivers that are planned to be dammed by Sarawak Energy to generate this electricity are our lifeblood," said Peter Kallang of SAVE Rivers. "Investing in this company to build transmission lines means becoming complicit in destruction."

In 2011 the Malaysian and Sarawak governments completed construction of the 2400 MW Bakun dam and later the 944 MW Murum dam. Neither is fully operational because of a lack of energy demand and technical design flaws, according to International Rivers.

Sarawak Energy says that Murum will start operating in the fourth quarter of 2014. It is aiming to bring the state's operating hydropower capacity to 7400 MW by 2025.

The projects form part of Sarawak's Corridor of Renewable Energy (SCORE) initiative, a development plan designed to exploit the state's resources and boost economic growth and development.

Sian Crampsie

 



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