Ray publishes Op-Ed with lessons for development banks after megadam collapses in Colombia

Rebecca Ray, a post-doctoral scholar at the GDP Center, published an Op-Ed, entitled “Colombia megadam collapse highlights need for comprehensive standards,” in response to the collapse of the Ituango dam (Hidroituango) this summer. Nearly 25,000 people were evacuated in the surrounding areas. Ray suggests that development banks must learn from this and remain vigilant in preparing comprehensive risk assessments for all projects.

Lessons from the article:

“This Hidroituango case highlights two important lessons. First, if the IDB [Inter-American Development Bank] wants to protect its reputation and its borrowers then it should require entities with links the IDB—such as IDB Invest and its joint fund with China —to apply the same standards as it does itself.  By applying due diligence and technical oversight throughout a project, development banks are supposed go beyond other financiers and ensure the quality of a project.

Second, given that accidents can happen with mega-dams no matter how high standards are, each actor in jointly financed project needs to do their own due diligence. As the investors in the Ituango dam have learned, passing the buck to other parties can be costly in terms of local livelihoods, delivering a project on time, the environment, and the reputation of the IDB and its offshoots.”

Ray also referred to a recent GDP Center study on development banks in the Andean Amazon that recommended “‘mutually reinforcing’ environmental and social risk management systems…to provide each partner involved in a project with more complete information on a project’s risks and rewards.”

The article was published on July 12, 2018 in Diálogo Chino.

Read the Op-Ed here