EIB Loan to SGC 'Wrong': Civil Society Groups
Civil society groups have protested formally that the European Investment Bank (EIB) systematically underestimated the climate footprint of a fossil fuel mega project, the Southern Gas Corridor.
One such, Bankwatch argues the EIB has failed to meet its own standards and not conducted or required a comprehensive climate impact assessment for the giant Southern Gas Corridor (SGC). Bankwatch said the EIB had provided "major financial support" to the Southern Gas Corridor using EU public money, despite its commitments to align its activities with the Paris Agreement. It filed a formal complaint February 7.
The bank approved last year two loans to the Trans Adriatic Pipeline (TAP) and the Trans Anatolian Pipeline (Tanap) sections totalling €2.4bn ($2.7bn). The TAP loan – worth €1.5bn – is the largest sum of public money ever extended to an energy project. This loan is also covered by an EU guarantee from the European Fund for Strategic Investments.
In part, the reason for these striking discrepancies is the EIB's use of outdated methodologies which do not reflect contemporary scientific understanding of the climate impact of natural gas. According to the complaint, the bank underestimated the global warming effect of methane, known as a relatively short-lived but extremely potent greenhouse gas, up to 86 times more powerful than carbon dioxide, according to the Intergovernmental Panel on Climate Change.
In addition, while a pipeline of the scale of the Southern Gas Corridor is typically planned to be operational for about half a century, the EIB's carbon footprint assessment does not consider the project over its full lifetime. Furthermore, the analysis shows the environmental and social impact assessments submitted to the EIB by project promoters also systematically underestimate 'fugitive emissions' – unplanned but inevitable releases of methane. These assessments also exclude key parts of the project such as the gas extraction and the pipelines carrying it through Azerbaijan and Georgia.
"This year, the EIB is reviewing its energy lending strategy and the NGOs call on the bank, the world's largest multilateral lender, to seize this opportunity to live up to its promises to align with the Paris Agreement and finally commit to halting support to fossil fuels."