Uganda: Bujagali Energy-08/Bujagali
Former employee of construction contractor
Worker health & safety and compensation
$100m A & C loans (IFC), $115m guarantee (MIGA)
The Bujagali Energy project comprises the development, construction, and maintenance of a run-of-the-river power plant with a capacity of up to 250 MW on the River Nile in Uganda. Bujagali Energy Ltd. also managed the construction of approximately 100 kilometers of 132 kV transmission line on behalf of the Uganda Electricity Transmission Company Ltd. to improve transfer of electricity from the plant.
Bujagali Energy Ltd is a Public Private Partnership owned by Industrial Promotion Services (Kenya) Ltd., the industrial development arm of the Aga Khan Fund for Economic Development and SG Bujagali Holdings, Ltd., an affiliate of Sithe Global Power LLC (US). IFC (#24408 and #33022) and MIGA (#6732) are supporting the $750 million project along with several other international financial institutions, including the International Development Association, African Development Bank and European Investment Bank. IFC’s investment comprises $130 million in A and C loans, and MIGA issued a $115 million guarantee to World Power Holdings Luxembourg S.à.r.l., a subsidiary of Sithe Global Power, for its investment in the project.
The complaint was submitted to CAO in June 2017 by a former employee of the former construction contractor, Salini Costruttori. The complainant claims that in 2009, during the time he was employed at the project site he suffered an injury that caused him severe chronic backache, for which he has not received any compensation.
CAO found the Bujagali Energy-08 complaint eligible for further assessment in July 2017 and conducted an assessment of the complaint. In March 2018, CAO completed the assessment. While the complainant had expressed an interest in participating in a dispute resolution process, the company declined to participate due to reasons that are reported in the CAO Assessment Report. Therefore, in accordance to CAO’s Operational Guidelines the case was referred to CAO’s compliance function for appraisal of IFC and MIGA’s due diligence.
CAO’s compliance appraisal found the Bujagali Energy-08 complaint to be similar in substance to a March 2011 complaint (Bujagali Energy-04) from workers who were injured while working on the construction of the project for the same Engineering, Procurement & Construction (EPC) contractor. The earlier case led to a CAO compliance investigation (also concerning the Bujagali Energy-06 case) that was publicly released in December 2017. Considering that CAO already looked into IFC’s analysis of the worker’s compensation structure and safety supervision during its investigation related to the Bujagali Energy-04 and Bujagali Energy-06 complaints, CAO determined that no investigation on this matter is merited at this time and decided to merge this case with the Bujagali Energy-04 and Bujagali Energy-06 cases for the purpose of monitoring.
In March 2019, CAO published a monitoring report of IFC/MIGA’s response to the Bujagali Energy- 04, 06, 07, and 08 cases. In response to the issues raised in the Bujagali Energy 04 & 08 complaints, CAO’s ongoing monitoring would review the outcomes of IFC’s scoping process once available.
In May 2020, CAO published its second monitoring report of IFC and MIGA’s response to the Bujagali Energy 04, 06, 07, and 08 cases. Since the first monitoring report, IFC completed its scoping report which included recommendations for possible additional support to injured workers. The report also identified local institutional capacity to support disabled workers and ongoing client community support programs that can be accessed by this group. In response to the issues raised in the Bujagali-04 and -08 complaints (injured workers), CAO’s ongoing monitoring will review the implementation of the recommended activities that were identified through IFC’s scoping process. In this context, it will be important to ensure that IFC’s response addresses concerns regarding the adequacy of compensation provided to workers seriously injured and the families of those killed during the construction of the project, in addition to the current program focus on livelihood restoration activities.
All documents relating to this case are available under "View Documents" below.
As per CAO's Operational Guidelines, this case will remain open as CAO monitors IFC's response to the findings.
An error was noticed in the monitoring report published in May 2020. A revised version of the document with erratum was posted June 10, 2020.
Status as of June 10, 2020