Today the European Bank for Reconstruction & Development is voting on a $50 million loan for oil drilling in Egypt. This is the first major loan by the bank in Egypt since the military takeover in July 2013. The EBRD seems eager to ignore the principles in its founding agreement promoting “initiatives in countries committed to and applying the principles of multiparty democracy, pluralism”, in its drive to promote liberalised markets and privatisation.
In the 6 months since the military takeover, Egypt has experienced intense state violence and increasing repression. Since November, the crackdown has expanded to target liberal and leftist journalists, bloggers and civil rights activists. The new draft constitution allows for military trials for civilians, while a new anti-protest law decreed by the military-installed president severely restricts all protest. 79 civil rights activists were recently arrested at a peaceful rally against military trials. 22 women were sexually assaulted by police and dumped in the desert.
What we are seeing is not a transition to democracy. Yet the bank remains eager to drive its agenda of expanded fossil fuel extraction and privatised economies. Despite the EBRD’s claims to be prioritizing renewable energy in its new countries of intervention, its support to an oil & gas projects in Egypt, which is one of few sectors that do not have difficulty in attracting investment, is seriously undermining this claim and the reputation of the Bank.
The loan is also one of the first tests facing the Bank after the approval of the energy strategy earlier this week. Today’s vote will be a test of how seriously the Bank treats the commitments enshrined in the policy to foster the transition to a low-carbon economy and prioritise energy efficiency, rethinking the energy system and setting standards and best practice in the energy sector.
Together with our allies at CEE Bankwatch, urgewald and Counterbalance, Platform wrote to the EBRD warning about the bank’s lack of additionality, and the danger of assuring the Egyptian government that it can get away with ever increasing repression and authoritarianism.
Earlier this year, the EBRD supported the Brotherhood’s government, despite massive popular opposition. When we raised concerns at the bank’s last AGM in Istanbul about a planned loan to the Kuwait Energy Company this spring, EBRD staff and directors defended the “democratic credentials” of the Brotherhood’s government. Barely seven months later, the Brotherhood has been deposed, the military is running the country and and the EBRD is repeating the same mistake again.
History repeats itself, first as tragedy, then as farce.