Construction of large dams in developing countries would be subsidised under European Commission proposals, despite protests from environmental groups and institutions such as the World Bank.
The large-dam subsidy is part of a package of proposals to give better treatment to renewable energy projects, including solar, wind, tidal, wave and small hydro projects provided to developing countries. It will be presented at a meeting in Paris on Monday of the export credit agencies of the world’s 29 richest countries.
The proposals, put forward in an European Commission document marked ”confidential” but leaked to the Guardian, suggest that the normal 10-year repayment period for such projects be extended to 15 years so that developing countries can afford the repayments. The export credit agencies, which are subsidised by taxpayers, will guarantee the bills if the countries default.
The proposals include large hydro-electricity projects, which environmental groups and the World Bank do not regard as renewables.
Evidence presented to the World Commission on Dams in 2001 said that methane releases from drowned vegetation in large hydro-schemes adds more global-warming gas to the atmosphere than is saved by not burning fossil fuels in conventional power plants.
The dams commission suggested a number of safeguards, but the World Bank and others have refused to back large hydro projects.
Last November a group of 15 non-government groups which monitor export credit agencies protested to the EC, urging that the proposal be dropped or given safeguards.
The then trade commissioner, Pascal Lamy, refused, saying in a letter that while he appreciated their ”genuine concerns”, a number of countries ”refused to accept the [World Commission on Dams] safeguards”.
Documents passed to The Guardian show that the large-dam subsidy is expected to be adopted at the two-day meeting of the export credit agencies.
Nicholas Hildyard of The Corner House pressure group, said: ”This is totally unacceptable. Supporting large dams, and claiming them as renewables, is promoting the same dirty business they have for years and pretending they are being green. There has been no consultation about this. This has all been done in secret and it is a disgrace.” – Guardian Unlimited Â