The Inter-American Development Bank said it may disburse $135 million in loans for the Camisea natural gas project in Peru as early as next month after addressing concerns raised by environmental activists.
The development bank will withhold the money until it makes sure safeguards for the environment are in place, IDB President Enrique Iglesias said in Lima.
“There is still a series of steps that must be taken and that are needed for the actual disbursement of the money,” Iglesias, 73, told journalists at the bank’s 45th annual summit. “The bank’s participation in Camisea has helped improve the environmental standards of the project enormously.”
The IDB delayed approving the loan for Camisea, one of Peru’s biggest investment projects ever, twice last year after groups including Amazon Watch and Amnesty International criticized the lender’s environmental risk assessments. Citigroup Inc. dropped plans to fund the $1.6 billion gas project last year, as U.S. senators including Edward Kennedy, a Massachusetts Democrat, and James Jeffords, a Vermont independent, called for better environmental safeguards.
The international lender set covenants tied to environmental standards that, should they are missed, would force early repayment of the loan, Dennis Flannery, a development bank vice president, said in an interview Friday.
“Three of the 135 loan conditions have not been met yet,” Peruvian Energy Minister Jaime Quijandria said in a statement.
Transportadora de Gas del Peru SA, a consortium led by Techint Argentina SA that is building the 460-mile pipeline through the Peruvian jungle, invested $60 million to meet all of the government’s standards, said General Manager Alejandro Segret.
Amazon Watch Executive Director Atossa Soltani said Transportadora has caused “serious” soil erosion, threatening the lives of 7,000 aborigines. Among the concerns are the potential spreading of diseases against which the Indians are unprotected, she said.
“We want the loan blocked until independent monitoring program is set up and the companies pay for the irreversible damages they have caused,” said Roger Rivas, 47, a leader of the Machiguenga indigenous tribe at a press conference in Lima.
The Camisea field, which has estimated reserves of 13 trillion cubic feet of gas, was discovered in the 1980s. The project is intended to make Peru energy self-sufficient by 2008 and boost the economy, according to the government. The country currently imports $500 million of energy annually.
