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Facilitating
Investment in Renewable Energy: What Role for Export Credit Agencies?
SEEN Presentation at the International Renewable Energy Conference
in Bonn, Germany.
The two U.S. export credit/investment insurance agencies (ECAs),
the Overseas Private Investment Corporation
(OPIC) and Export-Import Bank of the
United States (Ex-Im), are world class climate destabilizers:
From 1992-98, these two agencies together underwrote $23.2 billion
in financing for oil, gas and coal projects around the world; these
projects will, over their lifetimes, release 29.3 billion tons of
carbon dioxide. This figure is slightly greater than all global
emissions for 1996 . This investment in fossil fuels far outpaces
those of some multilateral development banks, such as the European
Bank for Reconstruction and Development ($1.2 billion and 6.5 billion
tons of CO2 from 1992-97 ) and rivals that of the World Bank ($13.6
billion and 37.5 billion tons of CO2 from 1992-98) .
Ex-Im and OPIC are heavily invested in fossil fuel power projects
in numerous developing countries and economies in transition, working
at cross-purposes with our stated foreign policy objectives. Ironically
some of these countries, such as China, India and Indonesia, which
are expected to be major emitters of greenhouse gases in the coming
century, are among the "key developing countries" the
U.S. State Department claims it is urging to participate "meaningfully"
in the Kyoto Protocol as a precondition for bringing the Protocol
to the U.S. Senate for ratification.
OPIC and Ex-Im are investing in coal-fired power projects in
countries where less carbon-intensive energy options, from natural
gas to solar, are abundantly available. In Indonesia, the two
agencies committed a combined $1.47 billion in support of the 4,920MW
Paiton coal-fired power complex, despite Indonesia's massive proven
natural gas reserves. OPIC later matched its record-breaking assistance
package for this Indonesia burner in support of a coal-fired power
plant in Morocco, the biggest private power project in Africa near
where a 50-megawatt wind farm was being developed. Ex-Im has been
similarly devoted to fossil fuels in China, committing a combined
$1.66 billion toward the development of seven power plants (6 coal-fired
and 1 gas-fired) in the country over six years.
Ex-Im and OPIC are violating U.S. environmental regulations.
These institutions should be commended for taking the lead amongst
export credit and investment insurance agencies worldwide by adopting
minimum environmental standards. However, adoption of minimum safeguards
is no substitute for abiding by the requirements of the U.S. National
Environmental Policy Act given the significant impact Ex-Im and
OPIC projects have on the earth's climate. Nor do these institutions,
or other international export credit and investment insurance agencies,
have any credible plan to participate in international agreements
aimed at solving climate change issues.
To review the SEEN/Friends of the Earth report on fossil fuels,
EXIM and OPIC, visit: http://www.seen.org/pages/reports/oeordonl.shtml
To read World Resources Institute's report, The Climate of Export
Credit Agencies, visit: http://www.wri.org/governance/eca.html
For further information on the global campaign for reform of export
credit agencies, visit: http://www.eca-watch.org/
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