International Rivers Network and the Bujagali Dam Project (A&B)

Posted: 25 Jul 2004


SUBJECT AREAS: business ethics, project finance, international investment, emerging markets, capital investment

Despite persistent opposition from various non­governmental organizations (NGOs), the World Bank Group's (WBG) board of directors was planning to vote on whether its affiliate organization, the Multilateral Investment Guarantee Agency (MIGA), would approve a $250 million loan guarantee for the Bujagali Dam project. Without the loan guarantee, the project company, AES Nile Power (AESNP), would not be able to raise the capital needed to finance the $582 million hydropower project located on Uganda's Nile River.

International Rivers Network (IRN), a U.S.-­based environmental NGO had been campaigning for over three years to stop the project because it felt the project economics unreasonably favored the sponsors, the project entailed significant environmental and social risks, and the investment process set a bad precedent for private investment in Africa. IRN, in conjunction with local NGOs, had delayed but not stopped the project. As of early June 2002, IRN campaigners wondered what else they could do to improve the terms of the deal for local citizens, enhance the debate about the investment process and the environmental impact, or stop the project.

This case is appropriate for courses on international finance, business ethics, economic development, general management, and negotiations. It is written from the perspective of an NGO and can be used to:

1) Illustrate the potential impact large infrastructure projects can have on host nations across a wide range of dimensions (e.g., financial, social, environmental, etc.).

2) Analyze the roles and responsibilities of various parties in developing socially, environmentally, and economically responsible projects. Which party has (or parties have) the responsibility for protecting the interests and economic well being of local citizens?

3) Understand the roles played by NGOs. To what extent do NGOs, especially foreign-based NGOs, have legitimacy (do they have the right to critique a domestic project that may provide badly needed services such as power)?

4) Show how infrastructure investments can be viewed as development options - the opportunity cost of overinvestment can be very substantial.

5) Question whether large infrastructure projects with private participation should proceed under different rules and procedures from public-sector projects (i.e., should there be equal or greater transparency, additional reviews and assessments, incremental disclosures, etc.).

Suggested Citation

Esty, Benjamin C., International Rivers Network and the Bujagali Dam Project (A&B). HBS Publishing Case Nos.: A Case: 204-083; B Case: 204-139; Teaching Note No.: 5-204-115, Available at SSRN:

Benjamin C. Esty (Contact Author)

Harvard Business School ( email )

Boston, MA 02163
United States

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