IPS (Washington bureau)
March 17, 2006

Environmentalists are warning investors that bonds to be sold soon will indirectly finance China’s Three Gorges dam. The dam’s future "rests squarely in the hands of international bankers and investors," says Probe International fellow, Dai Qing.

Continuing with their effort to block financing of China’s Three Gorges dam, environmentalists are warning investors that bonds to be sold soon will indirectly finance the mammoth hydropower project that critics say will be a social and environmental disaster. Major investment banks, including, Goldman Sachs, JPMorgan, Morgan Stanley Dean Witter, Deutsche Bank, BNP Paribas and Barclays Capital, are currently pricing approximately 1.75 billion dollars in bonds for the People’s Republic of China. The banks maintain that the use of proceeds from the bonds is not slated for the dam but will support "general governmental purposes." But environmental groups charge that the bonds indirectly fund the dam, the largest hydropower project in the world, through the China Development Bank and other state-run institutions. They point out that the preliminary prospectus of the bonds specifically mentioned the Three Gorges dam. "Concerned shareholders and customers of Morgan Stanley, JPMorgan Chase, aand Goldman Sachs should demand transparency and accounting for the use of proceeds from such bond underwritings," says Doris Shen, who co-ordinates a Three Gorges dam campaign at International Rivers Network (IRN), a California-based advocacy group.