and tell the European Bank for Reconstruction and Development to end loans for all dirty energy projects starting with coal.
Today, as the United Nations climate talks are taking place in Warsaw, the European Bank for Reconstruction and Development is attending the International Coal and Climate Summit. This lobby event is organised by the World Coal Association and is designed to promote dirty energy during the climate talks. The EBRD’s attendance suggests that the bank plans to continue pumping public money into carbon-intensive projects.
Between 2006 and 2011, 48% of the EBRD’s EUR 6.7 billion portfolio went to fossil fuels. The draft of the banks new energy strategy indicates that the EBRD plans to continue lending to dirty energy projects – including coal.
Today activists across Europe are taking action against the EBRD’s dirty lending and protestors in Warsaw are at the International Coal and Climate Summit to demand that people are put before coal.
The EBRD’s continued support for coal marks them out as one of the dirtiest public lenders, the World Bank and the European Investment Bank have recently introduced tight limits to their coal financing – the EBRD has still failed to do so. EU Climate Commissioner Connie Hedegaard recently called on the EBRD, EIB, and the World Bank — which have a combined annual lending pot of €130 billion — to end support for fossil fuels. There are also clear indications that the European public does not support the bank’s lending to fossil fuels. The EBRD recently received a 16,725 strong petition calling for them to stop financing new fossil fuel projects, starting with coal.
Europe urgently needs to change the direction of its energy policies and aid the transition to a low carbon, sustainable energy system. According to the 2012 Carbon Tracker report 80 percent of known fossil fuel reserves must be kept in the ground if we are to avoid a disastrous 2°C temperature rise. Public money should be used to fund renewable energy projects that provide heating and lighting for people living in countries of extraction as well as consumption.
What do the EBRD’s loans to fossil fuel projects look like? The bank has been expanding rapidly into its new target countries in North Africa and the Middle East – trying to assert itself and its neoliberal agenda before the revolutionary movements can prevent it. As the bank opens offices and begins lending in Egypt, Tunisia, Jordan and Morocco, new fossil fuel drilling and refineries have been amongst its top priorities. This in a region which is already set to be devastated by climate change as water sources dry up and desertification accelerates.
In their first year of operation in Egypt two of the EBRD’s largest loans were to fossil fuels. Earlier in the year the EBRD approved a loan of $40 million to Kuwait Energy. Ostensibly, this money was to reduce gas flaring, although a civil society investigation revealed this as packaging to disguise a conventional subsidy to expand oil drilling from the Red Sea to the deep south. Last week the EBRD announced further support for oil and gas drilling in Egypt with a proposed $50 million dollar loan for the Texas company IPR who are drilling in the Western Desert and the Red Sea. It is shocking that the bank is continuing to lend to projects in Egypt despite the military takeover there and horrific repression including hundreds of unlawful killings.
Egypt isn’t the only place where the EBRD are ignoring human rights abuses. The EBRD is the largest investor in the private and financial sectors of Azerbaijan – since the bank began lending in 2008 it has supported 137 projects. Yet the bank is not paying sufficient attention to who it is lending to. In the run up to the Azerbaijani Presidential elections the repressive Aliyev regime extended defamation law to include online activities. This was an attempt by the Azerbaijani President to quash the growing number of bloggers and social media users who were using the internet to criticize the corrupt regime. It was one of the measures that Human Rights Watch described as
a deliberate, abusive strategy to limit dissent.
Access Bank were the first company to bring a case under the new laws. They successfully penalized a former employee for comments he had made online. The company’s use of this anti-democratic law passed without comment from the EBRD who lent $25 million to Access Bank in 2012 and highlighted the company as one of their flagship projects in their 2013 report.
Tomorrow the Azerbaijani government, along with their lobby group the European Azerbaijan Society, are holding an event called ‘Days of Azerbaijan’ at the EBRD offices. The European Azerbaijan Society have recently received unwanted attention thanks to their successful wooing of British MPs with all expenses paid trip to Baku and other perks. The event will be attended by the Azerbaijani Ministry, the EBRD, diplomatic corps in London and business people from Azerbaijan. Representatives of Azerbaijani civil society have not been invited, despite requesting to attend.
The event is aimed at increasing the EBRD’s lending activities in Azerbaijan. One project that will undoubtedly be spoken about is the Euro-Caspian Mega Pipeline. The EBRD have already signaled their interest in lending to this vast fossil fuel infrastructure that would carry gas over 4,000 kilometers from the Caspian Sea to Italy. There are also plans to extend the pipeline complex across the Caspian to Turkmenistan. Not only would this create a huge resource grab but it would also lock Europe into fossil fuels for at least the next 35 years. The initial pipeline alone would put over a billion tonnes of co2 into the atmosphere by 2048.
The unjust impacts of climate change are already visible, as shown by the increasing frequency of horrific events like Typhoon Haiyan, yet the EBRD are showing no signs of ending their dirty lending habits. Megaloans for fossil fuels are what the EBRD excels at. The bank is eager to pump billions into the Euro-Caspian Mega pipeline, dirty power plants in Jordan fracking in Tunisia and drilling in Egypt. Public money should not be used to feed the ambitions of fossil fuel companies. The EBRD must stop funding these projects or it will prove that it is institutionally unfit for its role. It’s time for the EBRD to change up.