In his 18 months running the World Bank, James Wolfensohn has earned a reputation as something of a straight talker. Feeling the heat is Chilean electric utility Endesa. Wolfensohn has accused it of failing to fulfil environmental obligations that were part of an IFC loan for a hydroelectric plant on the Bio Bio river, 400 kilometres south of Santiago.
Wolfensohn wrote to Chilean finance minister Eduardo Aninat in early February. He starts in a relaxed tone, heading the letter My Dear Eduardo, and apologizing for having to try and reach him during his vacation. But Wolfensohn then asks for government help to find an amicable solution with Endesa, which he asserts "appears to have taken a less than constructive approach to its environmental and social obligations, in particular with regard to the preparation of a satisfactory cumulative impact assessment," for two hydro projects on the Bio Bio. This may result in declaring Endesa in default.
But just in case the seriousness of his letter isn't appreciated, he adds: "Finally, in view of the forthcoming visit to Washington of President Frei, I would greatly appreciate it if you would inform him of this letter and of the situation so that he will not be embarrassed or surprised while he is in Washington."