Latin American Development Bank Criticized for Energy Policies that Fuel Climate Change, and Ignore Needs of Citizens | Amazon Watch
Amazon Watch

Latin American Development Bank Criticized for Energy Policies that Fuel Climate Change, and Ignore Needs of Citizens

March 24, 2000 | For Immediate Release


RED BANCOS - RIOS VIVOS - WOMEN'S EYES ON THE BANK - ASOCIACIÓN LATINO AMERICANO DE ORGANIZACIONES DE PROMOCIÓN - REDE DE BRASIL - ESPACIOS INTERFOROS - ORGANIZACIÓN REGIONAL INTERAMERICANA DE TRABAJADORES

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New Orleans, LA – Large scale energy projects funded by Latin America’s largest development institution are harming the environment, fueling climate change, and have failed to meet the energy needs of poor and rural citizens, a coalition of the region’s civil society organizations said today.

The groups, which represent thousands of citizens from throughout Latin America highlighted their concerns about energy sector lending in a report released today at the annual meeting of the Inter-American Development Bank (IDB), which runs through March 27 in New Orleans. The report, entitled “Bank Energy Sector Policies in Latin America” was published by CENSAT Agua Viva, the Colombian non-governmental organization. This report is available on the web at http://www.bicusa.org.

The report shows that, despite commitments the IDB made in 1994 to incorporate environmental sustainability, social equity, and poverty alleviation goals in its lending programs, its energy sector funding in the ensuing years has met none of these goals.

“The IDB has lost another half decade in which it could have used its considerable influence to help promote clean energy and satisfy the needs of more of the 75 million people in the region who still don’t have it,” said Hildebrando Vélez, of CENSAT Agua Viva. Instead, the IDB has prioritized helping transnational companies profit from building polluting energy sources that are largely inaccessible to poor and rural dwellers.”

For example:

83 percent of the IDB’s financing for electricity between 1995 and 1998 went to dirty fossil fuel projects such as coal, oil, and natural gas. Only 17 percent of funding went to renewable energy projects, and many of them hydroelectric projects, which have resulted in forced removal of local populations, for example the Itá Dam in Brazil, a private sector project.
IDB investment in projects that promote energy efficiency constituted a mere 1.5 percent of its portfolio between 1995 and 1998 – almost 30 times less than resources to private sector energy projects in the region during the same period.
The 75 million people without access to electricity, especially in rural areas and marginal urban sectors, remain unlikely to gain such access: due to their geographic or financial constraints, they do not represent an attractive market for the types of private companies the IDB is helping to finance. These companies are reaping increased profits from IDB financing, while the cost of electricity rises for consumers, including those who can least afford energy costs.
There has not been adequate assessment of the cumulative environmental and social impacts of energy sector loans.
The organizations are calling on the IDB to institute a number of reforms in its energy sector, including:

Increase funding for energy efficiency programs and truly sustainable energy resources.
Create mechanisms to facilitate the internalization of environmental costs into conventional energy generation projects.
Condition any IDB funding of large scale energy projects on: the participation of affected communities and other sectors in all stages of design, planning, implementation and evaluation; continuous monitoring; and comprehensive social and environmental impact studies, including cumulative effects, to ensure that they do not destroy environmentally sensitive areas or threaten local cultures.
That the bank acknowledges its responsibility en the acceleration of climate change.
The groups will release several other reports throughout the week of the IDB meeting on topics such as the fostering of meaningful public participation in IDB projects, and the increasing role of the Bank in promoting private sector-led development. For more information and interviews, please call 202-256-9795 or visit room 288 C of the New Orleans Morial Convention Center. In addition, representatives of non-governmental organizations will hold a press briefing, Monday, March 27 at 3:30 p.m. in room 288.

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