Bujagali Indemnity Agreement with the Government of Uganda and the Proposed Isimba Hydropower Project - Fact Sheet

July 15, 2015

The World Bank is currently evaluating the impacts of the proposed Isimba Hydropower Project in Uganda in line with the 2007 Indemnity Agreement signed between the Government of Uganda and the World Bank under the Bujagali Hydropower Project.

The Indemnity Agreement set aside the Kalagala Falls site to ensure the protection of the natural habitat, environmental, and spiritual values associated with the Falls – principles to which the World Bank remains committed.

Sustainable development depends on protecting the environment and the global community must do more to manage the world’s diminishing natural resources. This is central to realizing the World Bank’s goals of ending extreme poverty and promoting shared prosperity. 

Since last year the Bank has reiterated its concerns with the Government that the Isimba Project, if constructed and operated in accordance with its proposed design, could potentially adversely impact the Kalagala Falls Site.

The Government of Uganda has confirmed in writing that it is committed to finalizing an Environmental and Social Impact Assessment for the Isimba Project in consultation with the Bank and in line with international standards for addressing impacts on the Kalagala Falls Site. The Government of Uganda also reassured the Bank that it will “not take action that would have an impact on the Kalagala Falls Offset” until they have reached agreement with the World Bank to ensure that the agreed objectives of the Indemnity Agreement are complied with.

The World Bank will enforce the Indemnity Agreement in order to achieve its objective of preserving biodiversity. Specifically, section 3.06 of the Indemnity Agreement states that:

“the Government of Uganda “shall set aside the Kalagala Falls Site exclusively to protect its natural habitat and environmental and spiritual values in conformity with sound social and environmental standards acceptable to the Association. Any tourism development at the Kalagala Falls Site will be carried out only in a manner acceptable to the Association and in accordance with the aforementioned standards. Uganda also agrees that it will not develop power generation that could adversely affect the ability to maintain the above-stated protection at the Kalagala Falls Site without the prior agreement of the Association. In addition, GOU undertakes to conserve through a sustainable management program and budget mutually agreed by the Government and the Association (no later than expiration of the prevailing sustainable management program or such later date as the Association may agree), the present ecosystem of the Mabira Central Forest Reserve, as well as the Kalagala Central Forest Reserve and the Nile Bank Central Forest Reserve on the banks of Kalagala Falls (as such Reserves are included within the Kalagala Falls Site).”