Guest post by Emma Hughes, of Platform.
The European Bank for Reconstruction and Development (EBRD) is one of the world’s largest development banks. As you might expect the bank has a particular view of what development looks like and how it can be achieved. It’s mandate states that it “Exists to foster the transition towards open market-oriented economies and to promote private and entrepreneurial initiative in the countries of central Europe to central Asia and southern and eastern Mediterranean” www.ebrd.com – well that’s one view of development.
The EBRD is an old friend of companies seeking to profit from dirty fossil fuels. Recently thanks to the work of groups like Bankwatch and now 350.org the EBRD’s lending mandate has received some unwanted attention. In response the bank has just published a future energy strategy where the central theme is transitioning to less carbon-intense energy. Despite the banks fine words they have failed to exclude dirty coal and fracking (although they have added some additional restrictions).
Signs are that the EBRD isn’t transitioning away from fossil fuels at all. They recently announced that they are considering financing the Euro-Caspian Mega Pipeline. This huge piece of fossil fuel infrastructure 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 and from Iraq and Iran. 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. A great way to fund less carbon intense energy.
The EBRD are clearly keen to get involved with this pipeline – they invited a key figure in its construction, BP Vice President Al Cook, to their most recent AGM in Turkey. Cook used his time at the AGM to talk up the size of his pipeline, declaring that, “It’s big – 56 inches wide! Why is it 56 inches? Because that’s as big as we can possibly make it. It’s that big because of our confidence”. Part of the reason for Cook’s confidence is the money public money banks such as the EBRD are likely to put up for the project. As Cook also commented, “we’ve come to rely on the EBRD since the early 1990s”.
The EBRD’s interest in the Euro-Caspian Mega Pipeline is just a small part of its fossil fuel obsession. 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 seem to 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.
Yet the bank has pressed ahead – dedicating $60 million to drilling in shale gas regions in Tunisia. The company receiving the subsidy, Serinus Energy, has already started fracking in Ukraine and has its sights on Tunisian “hot shale”, where the underlying rock is radioactive. Exploiting shale in Tunisia could have disastrous consequences; the country already faces major water scarcity. One of the concessions to be drilled with EBRD-financing is itself proposed as a protected region for the UNESCO World Heritage List, because of its hydrological potential.
In Egypt, 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. The bank also tried to make a second $40 million loan to expand Africa’s largest refinery – an already highly polluting complex in the middle of Cairo. Even basic consultation procedures with local communities were ignored, with the bank failing to publish key project documents in Arabic, until challenged by NGOs. Luckily, an active campaign by a coalition of groups in Egypt and internationally has pushed the EBRD to drop its loan.
But the future is dark. 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. Let’s tell then to stop.
Click here to find out more about the Euro-Caspian Mega Pipeline. And here for more on Egyptian struggles against dirty energy.
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