European Investment Bank approves over $1 billion for Africa's energy sector
21 December 2006
The EIB's emphasis on large, fossil fuel-based infrastructure projects a major cause for concern.
In the past month alone, the European Investment Bank (EIB) has approved an astounding €825 million (approximately $1.08 billion) worth of loans and investment for major energy projects in Africa. This development is seen as a move by the EIB to push through projects before the end of the 2006 Fiscal Year.
These investments include:
- a €300 million loan for the construction of a 1500 km-long transmission line from Johannesburg to Capetown, South Africa;
- €35 million toward the construction and operation of a natural gas pipeline in Egypt;
- €250 million for the construction of two 750 MW gas-fired combined cycle power plants, also in Egypt;
- €170 million for the expansion of Morocco's power grid;
- and €70 million for a stake in the West Africa Gas Pipeline, which will transport natural gas from Nigeria's Delta Region to industrial centers in Ghana.
The sheer volume of investment is a cause for concern, particularly considering the Bank's dubious track record in supporting major infrastructure on the continent, and the inadequacies of EIB safeguard policies to mitigate the negative social and environmental consequences that typically accompany large energy projects. This is especially troubling because the Bank lacks an accountability mechanism for projects outside the EU, and therefore affected communities have no recourse to protect themselves against the impacts of EIB-financed projects.
The limited scope of the Bank's transparency policy also precludes affected communities from accessing critical project-related documents such as environmental impact assessments (EIAs) and resettlement plans - the Bank justifies its non-disclosure of project information by citing the need for business confidentiality.
Apart from the direct effects on local communities, the Bank's investment in conventional fossil fuel extraction and fossil fuel-based power generation indicates a contravention of its stated commitment to combat climate change.
For more about these projects and to see what other projects the EIB is considering in Africa, view the EIB Extractive and Energy Projects in Africa Spreadsheet:
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