Asian Development Bank (ADB) is to review its a proposal to provide a loan of US$45 million (RM166.8 million) to Sarawak Energy Bhd (SEB) for a power transmission line.

This follows allegations of corruption made against SEB and its failure to duly consult and compensate affected indigenous communities, chairperson of Save Rivers Sarawak, Peter Kallang, said in a statement today.

ADB officers told representatives from Save Rivers, Malaysian indigenous People’s Network (JOAS) and other non-governmental organisations (NGOs), who were in Manila last week, that the bank would review its loan offer, Peter said.

The loan is being sought by state-owned SEB to build a high voltage transmission line from Mambong in Sarawak to West Kalimantan, Indonesia, as part of the Trans-Borneo Power Grid.

As of February 2015, SEB reported the completion of 90 percent of the transmission towers and 65 percent of the transmission line.

Peter ( right ) said the indigenous representatives from Sarawak highlighted their concerns about the loan in meetings with ADB's Office of Anti-Corruption and Integrity and senior staff of the bank.

“In particular, they presented the results of a fact-finding mission to the communities affected by the power line,” he said, pointing out that the ADB was taking their concerns very seriously and had initiated an in-depth due diligence process for the proposed loan to SEB.”

ADB officers told the delegation that they were particularly aware of SEB’s close ties with the family of former Sarawak chief minister Abdul Taib Mahmud.

SEB's track record also being reviewed

As a result of the complaints by the NGOs, the proposed SEB loan is currently undergoing intense scrutiny, and this includes a review of SEB’s corporate structure, track record and procurement practices.

ADB officers said the bank was committed to upholding its safeguard standards, including meaningful consultation and functioning grievance mechanisms.

Meanwhile, JOAS president  Thomas Jalong ( left in photo ) said: “We are confident that ADB’s due diligence process will reveal safeguard violations by SEB in the putting up of the transmission lines, as well as with other energy projects.”

In an immediate reaction, SED denied any wrongdoing and said it was “disappointed to note the latest chapter of the long running smear campaign waged against the company and the state government” by groups with “irrelevant agendas”.