In a statement, the Bank said the debarment is part of a Negotiated Resolution Agreement between Alstom and the World Bank which also includes a restitution payment by the two companies totaling approximately $9.5M. The debarment can be reduced to 21 months – with enhanced oversight – if the companies comply with all conditions of the agreement.

“This case demonstrates a clear commitment from the World Bank to ensure development funds reach their intended beneficiaries while setting a high standard for global integrity where project resources may be at stake,” said Leonard McCarthy, World Bank Integrity Vice President. “Alstom’s settlement with the Bank is a wake-up call to global companies that are involved in development business that need to ensure their operations with the World Bank are clean. Alstom is a major player in the hydropower sector and their commitment under this agreement is a significant step in deterring the risks of fraud and corruption.”

The Bank said that in 2002, Alstom made an improper payment of €110,000 to an entity controlled by a former senior government official for consultancy services in relation to the World Bank-financed Zambia Power Rehabilitation Project.

Alstom SA, Alstom Hydro France, Alstom Network Schweiz AG and their affiliates have committed to cooperating with the World Bank’s Integrity Vice Presidency and will continue to improve their internal compliance program, the World Bank said.

The debarment means that both Alstom Hydro France and Alstom Network Schweiz qualify for cross-debarment by other lenders under the Agreement of Mutual Recognition of Debarments that was signed on April 9, 2010. It is understood these include the Asian Development Bank and Inter-American Development Bank.

During the debarment period, Alstom SA and its other affiliates are conditionally non-debarred, the World Bank said. A number of other Alstom subsidiaries are involved in the hydro industry and these can continue to work on World Bank funded schemes.