The Arun III Dam: A test case in World Bank accountability

Abstract

Despite growing evidence of the unsoundness of the Arun III Dam, the World Bank seems determined to approve this massive hydroelectric project in a remote pristine valley in western Nepal. The costly Arun III could undermine Nepal's economy, dissipate local indigenous populations, and cause irreversible destruction to one of the last remaining intact forests in the Himalayas. Although local Nepalese hydro experts have promoted a series of viable alternatives, and donor governments have raised serious questions about the project, the Bank worries that if it backs down on Arun III it will lose credibility as a financing partner for large-scale infrastructure projects.