UK’s ECGD backs $1bn of loans for deep-sea oil drilling as climate talks take place in Durban.
Vince Cable’s department has broken a key coalition deal on the environment for a second time. UK Export Finance – also known as the Export Credits Guarantee Department (ECGD) – has announced it is backing up to $1bn of loans to Brazilian oil company Petrobras, which specialises in deep and ultra-deep water drilling .
The coalition agreement of May 2010 pledges that the ECGD will “become champion for British companies that develop and export innovative green technologies around the world, instead of supporting investment in dirty fossil-fuel energy production”.
The new loans to Petrobras come hot on the heels of confirmation in October that the department is backing a $11.6m loan for equipment in a Siberian coal mine .
Margaret Ounsley, Head of Public Affairs at WWF, said:
“It is really slightly gob-smacking that the Government can argue that financial support for a process that only last year was responsible for the worst accidental oil-spill in marine history in the Gulf of Mexico, is not “dirty”. One can only wonder what they did have in mind when they made their commitment to end subsidies for “dirty fossil-fuel energy production” as clearly this does not cover coal, nor deep-water drilling. Did they have their fingers crossed behind their backs when they signed the agreement? It is intensely disappointing.”
Madeleine Evans, Campaigns Officer at Jubilee Debt Campaign said:
“Vince Cable’s ECGD may have re-branded itself, but this shady government department continues to support projects with little regard for whether they threaten the environment or human rights, or create illegitimate debt. We need proper public scrutiny of what projects this department is using public money to support.”
The consideration of the new billion-dollar loan to Petrobras coincides with William Hague telling the CBI conference that it would be ‘fatal’ for the UK to dilute its commitment to the green agenda .
For more information contact Jubilee Debt Campaign on 020 7324 4722 or 07817 628196.
1. Jubilee Debt Campaign is the UK coalition campaigning for cancellation of unjust and unpayable poor country debt.
7. UK Export Finance is the new name for the Export Credits Guarantee Department (ECGD). It is the UK’s export credit agency. It backs loans to countries and companies to buy British exports. Traditionally 75% of the department’s support has been given to arms, aerospace and carbon-intensive industries. In the event of an loan backed by UK Export Finance not being repaid, UK Export Finance repays the loan instead.
8. For a loan to be backed by UK Export Finance, at least 25% of the equipment needs to be manufactured in the UK.
9. WWF and the Jubilee Debt Campaign are members of Clean Up Britain’s Exports (CUBE), which is challenging the lack of transparency at UK Export Finance, as well as its tendency to make loans to support fossil fuels and arms. Other members include, Christian Aid, Amnesty International and the Campaign Against Arms Trade (CAAT).