New agreement for financing renewable technology a Trojan horse for environmental destruction, NGOs say

September 7, 2005 Brussels, Belgium - A new agreement to finance renewable energy projects could be a Trojan horse that will lead to environmental destruction rather than environmental sustainability, warns a new NGO report. NGOs say the inclusion of large dams under the agreement is a betrayal of an otherwise positive effort to promote sustainable energy technologies like wind, solar, and geothermal.

"By extending special export subsidies to large dam projects, the OECD governments are turning an environment initiative into a Trojan horse for environmental destruction," said Peter Bosshard, Policy Director of International Rivers Network and co-author of the report.

As evidence of the potential environmental damage from large scale dams, the report cites the Nam Theun 2 dam in Laos, which will emit almost twice as much greenhouse gas as a gas-fired power plant generating the same amount of electricity. The NGO report also examines the social and environmental impacts of large dams financed by Export Credit Agencies (ECAs) in China, Laos, Lesotho, the Philippines, and Turkey. The impacts of these projects include large-scale involuntary resettlement, human rights abuses, the destruction of critical habitats of endangered species, and significant contributions to climate change from methane emissions.

The new Organization for Economic Cooperation and Development (OECD) agreement to be approved the week of September 6, looks set to include dams in the preferential terms for renewable energy projects, without the additional environmental safeguards that NGOs have called for. This inclusion undermines the credibility of the renewable energy agreement.

"If OECD governments want to show that ECAs can do something good, the choice is simple - drop large dams from the current proposal," said Aaron Goldzimer, a social scientist with Environmental Defense. "Not doing so demonstrates that after all these years, governments in wealthy Northern countries haven't learned a thing."

The NGOs are proposing that ECAs, like Export Development Canada, should only finance dam projects that comply with the best-practice recommendations of the independent World Commission on Dams. Current environmental guidelines for ECAs and the World Bank they say are insufficient to mitigate the impacts or large dams.

For further information:

A Trojan Horse for Large Dams: How Export Credit Agencies Offer Subsidies for Destructive Projects Under the Guise of Environmental Protection, Prepared for ECA Watch by Corner House, Environmental Defense, FERN, Friends of the Earth-Japan, the Halifax Initiative, International Rivers Network, Probe International, and the World Development Movement, September 2005, 27 pp., available at http://www.eca-watch.org/problems/fora/oecd/ECAW_reportondams_2sept05.pdf

Peter Bosshard, International Rivers Network, USA, Tel. +1 510 848 1155

Aaron Goldzimer, Environmental Defense, USA, Tel. +1 202 572 3395

Fraser Reilly-King, Halifax Initiative, Canada Tel. 1 613 789-4447

Pat Adams, Probe International, Canada Tel. 1 416 964-9223, ext. 227