EIB financed hydroelectric plant collapses in Panama

The plant that collapsed - Prudencia - is the biggest one of the three plants of Dos MaresAfter heavy rains a turbine of the Dos Mares project collapsed on October 16 before it even became operational [1]. A critical report by Counter Balance [2] this spring, among other things, warned for the poor construction of the project.  “It is high time for the EIB to thoroughly evaluate this disastrous project it should have never entered in the first place”, says Caterina Amicucci the author of the Counter Balance report.

Counter Balance already denounced the poor construction of the project in a critical report on EIB investments in Panama. The abduction canals were finished only with plastic films (no cement) which were floating in the water long before they were operational. The construction company Odebrecht is accused by Panama’s construction trade union SUNTRAC of killing one of their members in 2001 and is notorious for the poor labour standards it applies. Odebrecht pulled out after the disaster. [3]

This is not the first problem with this project. In August 2010 a nearby village was flooded after the company opened a sluice. Other damage to private property was caused by detonations in the early stages of the construction. Additionally the Counter Balance report lists a number of problems related to the project such as the excessive cost of the project (3 times higher than average for these projects), the alleged speculation on land which the company could buy below marked prices and the failure by the project promoters to properly consult local communities.

“Considering all this we called upon the EIB for an urgent evaluation of the project but up today nothing happened. The EIB is clearly not capable of monitoring its own projects. Dos Mares reads like the chronicle of a failure foretold. We are wondering when the EIB will finally act”, says Amicucci.

Dos Mares is a three plant cascade hydro project for 100% owned by the French GDZ Suez through 2 subsidiaries which received a USD 220 million loan from the EIB (already fully disbursed). After the tunnel collapse of Gigel Gibe 2 [4], this is already the second collapse of an EIB sponsored hydroelectrical project in just 2 years.

Notes for editors:

[1] Watch the news item on the collapse
[2] The Counter Balance report “Dire Straits: EIB investments in Panama and their impacts on indigenous communities workers and the environment”
[3] Odebrecht is the leading company of the consortium to build the metro in Panama City another project which is currently under appraisal in the EIB pipeline
[4] Counter Balance press release on the collapse of a tunnel at Gigel Gibe 2

For more info please contact

Caterina Amicucci
camicucci@crbm.be

+39 349 852 07 89

Berber Verpoest
press@counterbalance-eib.org

+32 484 508 416

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