6 - Pricing for Poverty

Summary

This chapter provides further context to the impact of project finance mechanisms by examining the Ugandan Bujagali Hydroelectric Power Project referred to in the Preface. This case study is different from the others. It focusses on the interface of contractual and policy instruments with indigenous peoples’ rights to land and then casts the net wider to examine how complex pricing terms and the inequitable negotiation of concessionary power purchase agreements (PPA), in which the government is the end buyer, will have implications for overall vulnerability; for example, by locking governments into an overall bad deal in which all the risk is passed onto the state which has little control over spiralling electricity costs. Thinking about these debt contract–community linkages and what might be done within the context of an important negotiated contract such as the PPA is crucial for two reasons: that of the spread of supposedly cleaner and greener hydroelectric projects worldwide to meet energy demand and the growth of the ‘people first’ trend in public-private partnerships in the quest to mobilise the private sector towards the Sustainable Development Goals.