Independent Investigative Mechanism

Cover Memorandum to Accompany the Report of the Review Panel and IDB Management Comments

On September 30, 1996, the Inter-American Development Bank (IDB) received its first formal request for an investigation of a project in accordance with the Independent Investigation Mechanism. The request was received from Sobrevivencia, Friends of the Earth Paraguay, as representative of a group of individuals affected by the Yacyretá Hydroelectric Project.

The Yacyretá Hydroelectric Project is a binational undertaking on the border of Argentina and Paraguay, and has been funded in part by loans from the IDB and the World Bank. At the time of the request, three IDB loans for the project had been fully disbursed. A fourth loan for Environment and Resettlement in Yacyretá had been approved, but disbursement had not commenced. Following an assessment of the request and of Management's comments on that request, the Board of Executive Directors of the IDB authorized a review of the existing situation for the purpose of determining whether the plans and actions agreed among the Bank, the borrowers, and the two countries, were adequate to achieve their intended purposes.

For the purpose of the review, the Board decided to use a panel of three experts from the Roster of the Independent Investigation Mechanism, and as far as practicable, to follow the administrative procedures established for investigations pursuant to the Mechanism. The panel report was completed in September 1997, and Management's comments were thereafter prepared and submitted to the Board. At several meetings between November 10 and 24, 1997, the Board met with the three experts and reviewed the Panel report and Management's comments.

The Board took note of the Panel report and Management's comments, without taking a final decision on the recommendations of the Panel.

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