World Bank Sanctions Chinese Firm Over Fraud In Zambia

The World Bank is sanctioning China Electric Design and Research Institute Co Ltd (CEDRI) and its subsidiaries as a result of fraudulent practices relating to a project in Zambia. 

CEDRI and its subsidiaries are contractors of the $210 million Lusaka Transmission and Distribution Rehabilitation Project. The project, which was approved in 2013 and is being implemented under ZESCO, seeks to increase capacity and improve reliability of electricity transmission and distribution in Lusaka. 

According to a statement released by the World Bank, “CEDRI engaged in fraudulent practices by failing to disclose a conflict of interest and by presenting false documents with CNEEC’s company name in order to meet the requirements of a contract under the project.” 

The sanctions will be in place for up to 18 months and the Chinese engineering group must now meet new conditions for participating in future bank-financed projects. While they are in place, they will also prevent the firms from participating in other multilateral development bank projects. Parent company China National Electric Engineering Co Ltd (CNEEC) has not been sanctioned as of yet but must meet agreed conditions to participate in future World Bank projects under the terms of a settlement agreement.